Hlo sir , I am 45 year old lady. My salary is 35 k and have an FD of 9 lakh, investing in ppf from last year only ie. 60 k per year and have done SIP of 5000 k per month ie. HDFC small Cap 1500 , HDFC Mid cap opportunities - 1000 k , HDFC Small Cap - 1500 , and HDFC Flexi cap - 1000 I need 25 lakh in 3 years for my daughter's education even right now spending 1 lakh per year in my son's education. Please suggest how it will be possible? Regards

Ans: Your efforts to invest regularly despite a modest income are truly appreciable. Let's now assess your present situation from all angles and create a solid, practical plan.

Understanding Your Financial Position
You are 45 years old and earn Rs 35,000 per month.

You have Rs 9 lakh in fixed deposits.

You have started PPF last year with Rs 60,000 per year contribution.

SIP of Rs 5,000 monthly across four equity mutual funds.

You need Rs 25 lakh in 3 years for your daughter’s education.

You currently spend Rs 1 lakh per year for your son’s education.

This shows you are balancing short-term needs and long-term goals. But the Rs 25 lakh target in 3 years needs extra planning and prioritisation. Let’s evaluate this deeply.

Immediate Challenges and Time-Sensitive Goals
Your most urgent goal is your daughter’s education corpus in 3 years.

Your current monthly income is tight after your expenses and SIPs.

SIP amount is small compared to the goal. So lump sum planning is necessary.

Fixed deposit is your biggest current resource. But it’s earning low returns.

Equity SIPs are good but high-risk for 3-year time frame.

So now we’ll look at this from three angles: Optimising your current resources, restructuring investments, and ensuring your goals are realistically achievable.

Step-by-Step Review of Your Mutual Funds
You are investing Rs 5,000 per month in:

HDFC Small Cap – Rs 1,500

HDFC Mid Cap Opportunities – Rs 1,000

HDFC Flexi Cap – Rs 1,000

One more entry for HDFC Small Cap mentioned – likely repeated

Let us assume your total SIP is split properly across these categories. But two things need urgent correction:

You are investing in two small cap funds. That is duplicate and risk-heavy.

For a 3-year goal, small cap and mid cap are too volatile. They may fall sharply.

Your SIP strategy is good for long-term wealth building, not for short-term goals. So, changes are needed.

Suggested Changes in SIP Allocation
Stop one of the HDFC Small Cap SIPs immediately. You don’t need both.

Pause the small and mid cap SIPs for now.

Redirect entire Rs 5,000 SIP into a short-duration debt fund or hybrid conservative fund.

Use only regular plans through a Certified Financial Planner or MFD. Avoid direct funds.

Direct funds don’t offer human guidance or support. You need monitoring, rebalancing, and exit support—especially during market corrections. Regular plans via MFDs with CFP credentials offer better care.

Issues with Index Funds or ETFs
You’ve not invested in index funds. That’s good. Index funds are unmanaged. They follow the market blindly. In volatile times, they fall as fast as the market does. You have a short goal. You need protection.

Actively managed funds are better here. Fund managers can take defensive steps. They can shift to cash or avoid falling sectors. That’s vital for your case.

Your Fixed Deposit—A Powerful Tool If Used Wisely
You have Rs 9 lakh in FD.

In 3 years, it will not grow much. Interest is taxed as per your slab.

For education goal, this is your main resource.

My recommendation:

Don’t wait for maturity. FD returns are low after tax.

Break the FD in parts.

Shift at least Rs 6 lakh into low-risk hybrid mutual fund in regular plan.

Keep Rs 2 lakh in a liquid mutual fund for emergencies.

Keep Rs 1 lakh in FD if you feel emotionally secure with it.

FDs are not wealth creators. They just preserve capital. But education inflation is rising fast. You need 8% to 9% growth. Hybrid mutual funds give this with limited risk over 3 years.

Strategy to Reach Rs 25 Lakh in 3 Years
Your possible sources to fund the education:

Rs 6 lakh from FD to be invested today.

Rs 5,000 SIP every month for next 36 months.

Potential education loan as last resort if target falls short.

Use a hybrid or balanced advantage mutual fund. Keep growth plan.

Avoid equity-heavy plans. That can backfire in case of a correction in 2026–27.

Also consider putting money in tranches, not in one shot. Use 2–3 instalments.

Review progress every 6 months with your MFD or CFP.

What About the PPF?
PPF is a great product. But it is a 15-year lock-in. You cannot touch it now.

Keep contributing Rs 5,000 monthly or Rs 60,000 annually.

Don’t expect help from PPF for daughter’s education. It will help in retirement or for son's college.

So continue as is. Don’t reduce this amount. It builds tax-free future wealth safely.

Managing Son’s Education Alongside
You already spend Rs 1 lakh per year on your son.

Ensure this cost is accounted for in your annual budgeting.

If needed, reduce luxury spending or pause non-urgent expenses.

Use Rs 1 lakh emergency reserve (liquid fund) to support any shortfall.

But don’t touch investments marked for daughter’s education. Keep those separate.

Importance of Personal Insurance Cover
You haven’t mentioned any insurance.

If you don’t have term life insurance, please buy it today.

A Rs 25 lakh to Rs 50 lakh term plan is needed.

Very affordable. Premium will be under Rs 7,000 annually.

Don’t buy LIC, ULIP, or investment-linked insurance.

Those are inefficient. They eat your money with low return and high charges.

Stick to pure term cover.

Emergency Reserve and Liquidity
You should maintain Rs 2 lakh in liquid funds.

This gives confidence and freedom during emergencies.

Avoid breaking long-term investments under pressure.

Add any annual bonus or gift money to this reserve.

How to Track and Adjust Progress
Review all investments every 6 months.

If market is doing well, start partial withdrawal one year before goal.

Keep moving goal money to liquid or overnight funds as the goal nears.

Take support from a trusted MFD or CFP to handle this process.

Always invest through regular plans. They offer alerts, rebalancing, goal updates.

Education Loan—A Back-Up Plan
If you still fall short, consider education loan.

Don’t avoid higher education due to gap of Rs 2–3 lakh.

Many banks offer low-interest education loans for girls.

Repayment starts after course ends.

But use this only as Plan B. Try to reach 90% target through investments.

Tax Implications of Your Investments
Short-term capital gains from mutual funds are taxed at 20%.

Long-term gains over Rs 1.25 lakh are taxed at 12.5%.

So, plan your redemptions in a tax-efficient way.

If your SIP gives large profits, stagger withdrawal across financial years.

Avoid These Common Mistakes
Don’t invest in direct mutual funds on your own.

Don’t invest in index funds or ETFs for short goals.

Don’t mix insurance with investment.

Don’t keep all funds in FD. It erodes value.

Don’t delay investing due to fear. Time is your ally.

What You’re Already Doing Well
You’ve started early despite salary limitations.

You are already using SIPs regularly.

You’ve understood the importance of PPF.

You’re planning ahead for children’s education.

This mindset is rare and precious. You are already halfway there.

What You Must Do Next
Realign your SIPs for short-term goals.

Break FD and reallocate strategically.

Maintain emergency reserve in liquid mutual funds.

Use a certified MFD or CFP for guidance.

Start goal tracking semi-annually.

Finally
You are trying to create a strong future with limited income. That shows wisdom.

Your 3-year goal is achievable, but needs focused realignment today.

Use your FD wisely. Stop risky SIPs meant for long term.

Shift towards safer hybrid mutual funds via regular plans.

You will reach close to Rs 25 lakh without burdening yourself.

If gap remains, use an education loan as final option.

Stay disciplined. Review often. And don’t do it all alone. Use help from a trusted CFP.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment