The day my daughter was born, I thought I did everything right. Called the relatives. Handed out sweets. Opened an FD "for her future".
What I didn't do was open a single account in her name. Not because I decided against it. Because nobody told me I could.
Saving for them, and saving in their name
For years I kept the money in my own mutual fund and told myself it was earmarked for her. Earmarked is not the same as hers.
I dipped into it once, for a car down payment. Temporarily, obviously. That is how earmarked money works — it stays earmarked until something else needs it more.
When the folio is in your child's name, something shifts. Taking money out becomes a decision you have to make deliberately, and most people don't make it. It compounds without interruption. And when they turn 18, it isn't a gift you hand over. It's already theirs.
What the delay cost
The same SIP, started four years later, doesn't just lose four years of contributions. It loses four of the years where compounding does the most work.
| ₹1,000 a month, started | Value at 18 |
|---|---|
| At birth | ₹7.6 lakh |
| At age 4 | ₹4.4 lakh |
A ₹1,000 monthly SIP compounded at an assumed 12% a year, contributions at the start of each month. 12% is an assumption, not a promise — equity funds have returned both more and less than this over long periods, and can lose money. These figures are illustrative only.
₹3.2 lakh. Not because I didn't care — because I didn't know.
Four years of not knowing cost roughly ₹3.2 lakh. Same money going out every month. Same fund. Only the start date was different.
The best time to invest in your child's name was the day they were born. Start small. Start in their name. The amount can change later; the years can't.