saving-plans-and-schemes-to-give-children-a-debt-free-college-education

Saving Plans & Schemes to Give Children a Debt-Free College Education

Explore smart investment options to secure a debt-free education fund for your child and protect their future dreams.

Written by : Knowledge Centre Team

2025-09-05

1459 Views

10 minutes read

Exit Pop Up

Live Life More Confidently

Get best insurance from our experts

Name is required Name should be Valid
Mobile Number is required Mobile Number should be Valid
DOB is required DOB should be Valid
Annual Income is required
Please tick to proceed further.

Thank you for your interest in our product. Our financial expert will connect with you shortly to help you choose the best plan.

Providing children with a quality education is one of the biggest financial goals for any family. Higher education costs are rising rapidly, and without proper planning, they can create a heavy debt burden for both parents and children. Building a sufficient education fund requires early planning, disciplined savings and an understanding of how inflation can affect future expenses.

If your child is still young, you may not know which course they will choose or which university they will attend. However, it is important to estimate an approximate amount and start investing early. Even small contributions made regularly can grow into a sizeable education corpus over time. The power of compounding works best when investments are given enough time to grow. 

Key Takeaways

  • Start saving early to build a strong education fund without financial stress later.

  • Diversify investments across low-risk and growth-oriented plans to beat inflation.

  • Consider plans like PPF, Sukanya Samriddhi, Moneyback policies, and child ULIPs for long-term benefits.

  • Avoid common mistakes such as ignoring inflation, delaying savings, or relying only on fixed deposits.

  • Review your plan annually to stay on track and ensure your child’s education goals are always secure.

5 Investments for Your Child’s Higher Education

When you plan for your child's education, you need to look for savings plans that have a maturity date in line with the year you will need the funds. Below are the five best savings plans you can explore for your child's education.

  1. Moneyback Plan: Planning for a child's education is not only about the cost of college fees. The education cost starts well before that. You will have to invest in their coaching classes at different stages, and then for the graduation fee.

    With a Moneyback plan, you get payouts at regular intervals and a lump sum amount at maturity. In case of an unfortunate event, you get a sum assured that acts as a plan B for you. This way, the Moneyback Advantage plan secures the future of your child from all sides.

    When you buy the plan, you have to pay a premium for ten years. You receive the payouts at the end of the 5th, 9th, and 13th years. You can use these payouts to meet different expenses related to your child’s education. At maturity, you will receive the sum assured that you can use to pay college fees.

    The premium amount will depend on your age and the sum assured you want. You also get tax benefits on the premium you pay for this plan.

guaranteed savings plan
  1. Public Provident Fund (PPF): Public Provident Fund is another investment option you can explore for your child's education. The PPF comes with a minimum tenure of 15 years. If it is in line with your requirements, you can opt for this savings plan. The rate of interest varies under this plan. At present (July 2025), the rate of interest is 7.1%.
    You have the facility of partial withdrawal in the 7th year, in case you need funds before the tenure is complete. You can start investing in a PPF account with as little as ₹500.
  2. Sukanya Samriddhi Yojana: This savings plan is specifically for a girl child. You can deposit a minimum of ₹1000 and a maximum of ₹1.5 lakh per year in this savings plan. The policy duration is 21 years. You will have to deposit money only for the first 15 years. You get a higher interest rate under this compared to other similar savings plans. The amount invested is eligible for tax deductions. Although the policy tenure is 21 years, you can withdraw partial funds, up to 50%, once your girl child turns 18 years of age.

    Learn more about the Sukanya Samriddhi Yojana.

  3. Child ULIP (Unit Linked Insurance Plan):A Child ULIP combines investment and insurance to help you build a secure education fund. It allows you to invest in equity, debt, or balanced funds based on your risk appetite. You pay regular premiums, part of which provides life cover, while the rest is invested. In case of an unfortunate event, the insurer pays the sum assured, and future premiums are waived, but the investment continues. At maturity, you receive the accumulated fund value, which can be used to cover higher education expenses.
  4. Fixed Deposit for Minors: A Fixed Deposit (FD) in your child’s name is a safe and disciplined way to build a corpus for future education costs. Banks and post offices offer special FD accounts for minors with attractive interest rates. You can choose the deposit term so that the maturity aligns with your child’s college years. Partial withdrawal is usually allowed in emergencies, and the interest earned can help beat moderate inflation. The FD amount is paid out to the child or guardian when it matures.

Learn More - Fixed Deposit vs Guaranteed Savings Plan: When to Invest?

Start Saving Smart, Grow Wealth Faster

Please enter correct name Please enter the Full name
Please enter valid mobile number Please enter Mobile Number
Please enter valid email Please enter Email
Consent is required

Enter OTP

An OTP has been sent to your mobile number

Didn’t receive OTP?

Application Status

Name

Date of Birth

Plan Name

Status

Unclaimed Amount of the Policyholder as on

Name of the policy holder

Policy Holder Name

Policy No.

Policy Number

Address of the Policyholder as per records

Address

Unclaimed Amount

Unclaimed Amount
Error

Sorry ! No records Found

.  Please use this ID for all future communications regarding this concern.

Request Registered

Thank You for submitting the response, will get back with you.

Common Mistakes to Avoid

Many parents start planning for their child’s education, but overlook a few gaps that can affect how much they finally save. Watch out for these mistakes to protect your goals:

  • Ignoring inflation: Many parents underestimate how much education costs can rise over the years. Always factor in an inflation rate of at least 8–10% when calculating the final amount needed.

  • Relying only on fixed deposits: Putting all savings into FDs may feel safe, but it rarely beats inflation. Combine safe options with investments that offer higher growth potential.

  • Delaying savings: Waiting too long to start means you have to save larger sums later. Starting early gives your money more time to grow with compounding.

  • Not updating the nominee: Life changes like marriage, divorce or the birth of another child may affect who should receive the benefit. Always review and update nominees in your policies.

  • Skipping annual reviews: Many parents choose a plan and forget about it. Review your investments every year to check if they still match your goal and adjust if needed.

  • Missing liquidity planning: Some parents lock in all funds without thinking about coaching fees or other costs before college. Choose plans that allow partial withdrawals when needed.

Tips to Start Saving Early

Starting early is the simplest way to build a strong education fund without putting pressure on your future income. The power of compounding works best when your money has more time to grow. For instance, investing ₹3,000 every month for 18 years at an average return of 8% can grow to around ₹14 lakh, while the same amount invested for just 10 years would reach only about ₹5 lakh. To make saving effortless, set up an auto-debit from your bank account so that a fixed amount goes towards your child’s education fund every month. This helps you stay consistent without missing payments. It is equally important to check your plan once a year to see if your savings are on track and make any adjustments needed to match rising education costs.

Also Check:- Power of Compounding Calculator

Conclusion

Some life goals cannot be compromised or delayed. Your child's education is one such goal that deserves a dedicated plan. Keeping this fund separate from other investments helps you stay focused and prepared for rising education costs. The best savings plans for children ensure that they have access to the opportunities they deserve, no matter what life brings. At Canara HSBC Life Insurance, we understand how important this goal is for every parent. Our child plans are designed to help you build a secure education fund, so you can watch your child’s dreams take shape with confidence and peace of mind.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

Recent Blogs

Public Provident Fund (PPF): Account, Features & Tax Benefits
20 Jan '26
1907 Views
10 minute read
Maximize your savings with PPF tax exemption. Discover how investing in a Public Provident Fund secures your future and reduces taxable income.
Read More
Saving Plan
How Can You Ensure a Regular Income for Your Family?
26 Dec '25
3219 Views
7 minute read
Regular income defines your family’s lifestyle and financial status. Know practical ways to create a steady income stream for your family using savings plans, investments, insurance payouts, and disciplined financial planning.
Read More
Saving Plan
NPS for NRIs: How to Save for Retirement from Abroad?
21 Dec '25
1552 Views
10 minute read
Learn how NRIs can invest in NPS to save for retirement and optimize their long-term retirement plans from abroad.
Read More
Saving Plan
13 Factors to Consider Before Buying a Monthly Investment Plan
18 Dec '25
1243 Views
6 minute read
Learn the 13 important factors to consider before buying a monthly investment plan, including returns, safety, payout frequency, flexibility and long-term financial needs.
Read More
Saving Plan
When Is a Guaranteed Savings Plan Useful for Financial Planning?
15 Dec '25
1092 Views
8 minute read
Learn how guaranteed savings plans work, key benefits, ideal situations for use, and how they provide predictable returns and financial security for short- and long-term goals.
Read More
Saving Plan
Top Investments with Guaranteed Returns in India in 2026
13 Dec '25
1977 Views
8 minute read
Discover top investment options in India with guaranteed returns. Secure your financial future with reliable plans from Canara HSBC Life Insurance. Explore now!
Read More
Saving Plan
Top 9 Investment Tips Young Earners Should Know
11 Dec '25
1091 Views
8 minute read
What are the best investment tips for beginners? Should young investors follow specific investment tips? Discover the best beginner tips for investing and saving for a financially stable future.
Read More
Saving Plan
Do Long-Term Saving Plans Give Better Returns?
11 Dec '25
1086 Views
8 minute read
Benefits of long-term investments are as good as the compounding goes. The longer you stay invested in the best savings plan, the better your returns could be from an investment.
Read More
Saving Plan
When Should You Start Saving? Choose the Best Savings Plans
11 Dec '25
1087 Views
7 minute read
Learn the right age to start saving and how to choose the best savings plan to achieve your financial goals effectively.
Read More
Saving Plan

Our Top-Selling Insurance Plans

We bring you a collection of popular Canara HSBC life insurance plans. Forget the dusty brochures and endless offline visits! Dive into the features of our top-selling online insurance plans and buy the one that meets your goals and requirements. You and your wallet will be thankful in the future as we brighten up your financial future with these plans.

Fixed Returns, Zero Risks & Worries

iSelect Guaranteed Future Plus
  • 4 plan options
  • Life cover + Guaranteed benefits
  • Accidental death benefit
  • Premium protection cover

Save, Dream, Plan. Live Peacefully

iSelect Guaranteed Future Plan
  • 4 plan options
  • Guaranteed Maturity Benefit
  • Premium Protection Cover
  • Tax Benefits