PPF Vs MF

I have gone through your article on Post Office savings schemes, which I found very informative. I want to know whether I can invest in PPF for creating funds for my child’s higher education. She is presently five years’ old. The funds will be required when she reaches 18 years of age.

- Ashwini Verma

Editor Responds : PPF is mostly used for retirement purposes but there is nothing that stops you from using it for your child’s higher education. Since it has a lock-in period of 15 years you may not utilise it at the age of 18 years in normal circumstances. Since your child is of five years, you can use the amount once your child reaches 20 years. Therefore, it is better to start your SIP in a good mid-cap or small-cap fund as you have a longer investment horizon.