Best Mutual Fund for Children Future And Education in India

The moment you become parents, you need to start planning for the best future of your children. While some start investing in high dividend-paying stocks or gold, you still need to make a secure investment for the long run. This is where the best children mutual fund plays an important role.

Known for offering better returns with secured positioning, the children mutual fund schemes allow you to secure the future of your child easily. But now the question is, what are these funds in reality? Also, which are the top-performing choices that you should opt for when you are looking to invest?

So, let us explore the answers to all these questions in the guide over here. 

What Is a Children Mutual Fund?

A children mutual fund is specially designed for the future of a child. It is an investment product meant to help parents save and grow money. This will be linked to their child’s future goals such as education, marriage, or financial security. These funds are typically hybrid in nature, combining both equity and debt investments to offer a balanced approach.

Key Features of Children Mutual Funds

• Long-Term Goal Planning: Built for objectives like higher education, marriage, or career startup when the child turns 18 or 21.

• Hybrid Fund Structure: Invests in a mix of equity and debt to provide growth with risk control.

• Lock-in or Restricted Withdrawal: Some funds have a lock-in period of 5 years or until the child reaches adulthood to avoid premature withdrawals.

• Child-Centric Ownership: While a parent manages the fund initially, the child becomes the owner once they turn 18.

• SIP-Friendly: Allows monthly investments through SIPs, starting from as low as Rs. 500, making it accessible to most families.

• Tax-Efficient Redemption: If redeemed after long-term holding, it may offer tax-efficient capital gains.

• Gift Investment Option: Often marketed as children gift mutual funds, ideal for gifting during birthdays or other milestones.

Top 10 Child Mutual Funds in India

Now that you understand what children's mutual funds are, it's time to explore the best options available for you. Here, we’ve shortlisted the 10 best children's mutual funds in India based on their returns, AUM, fund exposure, and expense ratio:

The data presented here is as of 31 July 2025.

Overview of the Best Children's Mutual Funds in India

Here is a detailed overview of top children's mutual funds to help you understand their features, pros and cons, including minimum investment, expense ratio, fund exposure, and more.

1. SBI Magnum Children's Benefit Fund - Investment Plan

This children mutual fund is an aggressive hybrid scheme tailored for long-term goals like education and marriage. It invests heavily in equities with some debt exposure, balancing growth and stability. With a 5-year lock-in, it encourages disciplined investing for your child’s future. You can begin with a SIP for kids starting at just Rs. 500 or a Rs. 5,000 lump sum. 

It has shown competitive performance since its inception and suits parents planning early. Exit load applies if redeemed within three years after the lock-in. It’s a strong option for those exploring the best SIP for child education in India.

2. Tata Young Citizens Direct

This children gift mutual fund is an equity-oriented scheme aimed at long-term goals like education and financial security. With a history dating back to October 1995, it invests across large, mid, and small-cap stocks. The fund has a lock-in of 5 years or until the child turns 18, whichever is later. 

You can start investing with a SIP of Rs. 500 or a lump sum. It has an expense ratio of 2.06% and is benchmarked against the Nifty 500 TRI, offering exposure to broad market performance. Ideal for parents looking for a long-term, growth-oriented investment for their children.

3. ICICI Pru Child Care Fund-Gift Plan

This children gift mutual fund is a solution-oriented hybrid scheme focused on long-term goals like education or marriage. It primarily invests in equities along with a small portion in debt and money market instruments to manage risk. 

The fund comes with a lock-in period of 5 years or until the child turns 18, whichever is earlier. Investors can start with a SIP for kids from Rs. 100 or a lump sum of Rs. 5,000. With an expense ratio of around 1.46% (Direct), it offers a balanced approach for parents planning secure, long-term wealth creation for their child.

4. Aditya Birla SL Bal Bhavishya Yojna

This children mutual fund scheme is an open-ended, equity-oriented plan aimed at long-term goals like education and future security. It invests predominantly in equity (65–100%) with limited exposure to debt and REITs for added stability. 

The fund has a mandatory lock-in of 5 years or until the child turns 18, whichever is earlier. Investors can start with a SIP for a child’s future from Rs. 500 or invest a lump sum of Rs. 1,000. The scheme is benchmarked to Nifty 500 TRI and managed by experienced fund managers, making it suitable for parents planning goal-based investing for their children.

5. Axis Children's Fund - No Lock-in - Regular Plan - Growth

The Axis Children’s Fund – No Lock-In offers a flexible way to invest in your child’s future without being restricted by a mandatory holding period. It combines equity for long-term growth and debt for added stability, making it suitable for future goals like education or marriage. 

Unlike most children's mutual fund schemes, this plan does not require a lock-in, allowing easier access to funds when needed. You can start with a SIP for a child’s future from Rs. 500 or a lump sum of Rs. 1,000, making it ideal for those looking for both structure and liquidity in child-focused investments.

6. Union Children’s Fund

The Union Children’s Fund is a solution-oriented equity scheme designed to help parents build wealth for their child’s long-term goals. With a well-diversified portfolio across large, mid, and small-cap stocks, it focuses on a balance between growth and value opportunities. 

The fund follows a disciplined investment approach with predominant equity allocation. While it has a very high-risk profile, it suits investors with a long-term horizon. You can start with a SIP for kids from Rs. 500 or a lump sum of Rs. 1,000. Benchmarked to the BSE 500 TRI, this children mutual fund scheme is ideal for structured, goal-based planning.

7. UTI Children's Equity Fund Direct-Growth

The UTI Children's Equity Fund is a solution-oriented equity mutual fund designed for long-term child-focused goals like education and financial security. It has a lock-in of 5 years or until the child turns 18, whichever is earlier. The fund invests in a diversified portfolio of equity shares across sectors and market capitalizations, focusing on sustainable and transformational businesses. 

You can start with a lump sum of Rs. 1,000, and the scheme allows systematic investments for steady wealth building. With a direct plan expense ratio of 1.17%, this children mutual fund is benchmarked against the Nifty 500 TRI index.

8. LIC MF Children's Fund Direct-Growth

When it comes to building a strong financial base for your child’s future, this children mutual fund offers a structured approach. The scheme primarily invests in equities, giving it high growth potential, while maintaining some debt exposure to manage volatility. 

It features a lock-in of 5 years or until the child turns 18, whichever is earlier, promoting long-term discipline. You can start with a SIP for child’s future from just Rs. 200 or a lump sum of Rs. 5,000. With a moderately high expense ratio of 1.63%, this fund follows the CRISIL Hybrid 35+65 Aggressive Index as its benchmark.

9. HDFC Children's Fund Direct Plan

If you're looking to invest for your child’s future in a structured way, this children mutual fund from HDFC offers a strong long-term option. It follows a hybrid model, allocating 65–80% to equities and the rest to debt and money market instruments to balance growth and stability. 

The fund has a lock-in of 5 years or until the child turns 18, whichever comes earlier. With a minimum SIP of Rs. 100, it's accessible for most families. Benchmarked against the Nifty 50 Hybrid Composite Index, the scheme is ideal for parents planning disciplined, goal-based investments for education or life milestones.

10. Axis Childrens Fund - Compulsory Lock-in - Direct Plan - Growth

Setting aside money for your child’s future needs more than just saving, it calls for consistent investing. This children mutual fund scheme from Axis offers that discipline with a lock-in of 5 years or until the child turns 18, whichever comes first. 

It combines equity for long-term growth and debt for added stability, making it ideal for education and other life-stage goals. You can start with a SIP of Rs. 1,000 or a lump sum of Rs. 5,000. With a reasonable expense ratio of 1.35%, it tracks the Nifty 50 Hybrid Composite Debt 65:35 TRI benchmark.

Why Starting a SIP for Girl Child Is a Good Idea

Investing through a SIP for girl child is a smart and practical approach for long-term financial planning. Here’s why it makes sense:

• Encourages disciplined investing: A Systematic Investment Plan ensures regular contributions, helping parents build a financial habit that supports the child’s future.

• Takes advantage of compounding: Starting early allows investments to grow over time, especially when choosing the best mutual fund for girl child with a long horizon.

• Beats inflation: SIPs in equity-oriented children mutual fund schemes offer growth potential that can outpace rising education and lifestyle costs.

• Affordable and flexible: Parents can start with as little as Rs. 500 per month, making it accessible to families with different income levels.

• Goal-based planning made easy: Whether it’s for higher education, career ambitions, or marriage, the best SIP for child future helps align investment with specific life goals.

Choosing the right SIP for children, especially for a girl child, sets the foundation for financial security and confidence in achieving her dreams.

How to Choose the Best SIP Plan for Your Child’s Future

Selecting the right SIP plan is key to building a solid financial foundation for your child. Here are 5 important factors to consider when choosing the best SIP for children:

1. Define Your Investment Goal

Identify whether you are investing for education, marriage, or long-term security. Knowing the purpose helps you choose the most suitable children mutual fund scheme.

2. Understand the Lock-In Period

Most child-focused SIPs come with a 5-year lock-in or until the child turns 18. Choose based on how long you can stay invested without needing the funds.

3. Evaluate Asset Allocation

The best SIP for child education usually combines equity for growth and debt for stability. Hybrid funds are ideal for balancing returns and risk.

4. Check Past Performance

Look for consistent 3-year and 5-year returns, not just short-term spikes. Steady performance over time is a sign of a reliable fund.

5. Start with an Affordable Amount

You can begin a SIP for kids with as little as Rs. 500 or Rs. 1,000. Increase the amount gradually to match your income growth and financial goals.

By following these steps, you can confidently select the best SIP plan for child future with a long-term vision.

SIP vs Lump Sum – What’s Better for Child Investment?

When it comes to investing for your child’s future, both SIP and lump sum have their place. Here's how they compare:

1. SIP for Kids

• Ideal for salaried parents or those with regular income

• Helps build wealth gradually through monthly investments

• Instills discipline and reduces the risk of market timing

• Best suited for long-term goals like education and marriage

• Start small, as low as Rs. 500, in the best SIP for children

2. Lump Sum Investment

• Suitable if you have a large amount ready to invest

• Better when markets are low and expected to grow

• Requires careful market timing and financial planning

• Can deliver good returns when invested early and left untouched

Verdict: For most parents, a SIP for child education is the more practical and consistent method, especially when started early and paired with a child-focused mutual fund.

Conclusion

Investing in a children mutual fund scheme through a SIP for kids is one of the most effective ways to secure your child’s future. Whether you’re planning for higher education, long-term stability, or marriage expenses, the earlier you begin, the more you benefit from compounding. 

Look for funds with goal-specific lock-ins, strong equity exposure, and reasonable risk levels. Whether you’re planning for a girl child’s future or starting with just Rs. 500 monthly, consistency matters more than amount.

Start investing today with Rupeezy and build a future your child deserves.

FAQs

Q1. What is the best mutual fund for a girl child in India?

While there’s no fund exclusively for girls, top options like HDFC Children’s Gift Fund and ICICI Child Care Fund are often recommended as the best mutual fund for a girl child due to their long-term growth potential and structured lock-in benefits.

Q2. Can I use SIP for child education planning?

Yes, a SIP for child education is ideal for long-term goals. It helps parents invest regularly and gradually build a corpus for future academic expenses, especially when started early in a suitable child-focused mutual fund.

Q3. Is SIP for children safe and reliable?

A SIP for children in hybrid or balanced funds is considered relatively safer for long-term investing. While market risks exist, investing consistently for 10–15 years reduces volatility and improves the chance of wealth creation.

Q4. What is a children's gift mutual fund?

A child's gift mutual fund is a solution-oriented scheme designed to accumulate wealth for a minor child’s future. These funds are typically gifted by parents or relatives and have a fixed lock-in period.

Q5. Which children's mutual fund scheme is best for SIP?

Funds like SBI Magnum Children’s Fund, UTI Children’s Equity Fund, and Axis Children’s Fund are considered among the best SIP for children, offering a good balance between equity exposure and disciplined investment features.