New Delhi
Children’s mutual funds in India have recorded strong growth over the last five years as parents look for better ways to plan for their children’s education and future needs.
A recent report by ICRA Analytics said the category grew by about 21 percent in five years and is expected to continue growing at a double digit pace in the coming years.
The growth is mainly driven by rising education costs, which have been increasing by nearly 11 to 12 percent every year, along with better returns offered by market linked investment options.
The assets under management of children’s mutual funds jumped sharply to Rs 25,675 crore in November 2025 from Rs 9,866 crore five years ago, showing growing investor confidence.
During the same period, the number of investor folios increased to around 32 lakh from nearly 29 lakh, reflecting wider participation by parents across the country.
At present, there are twelve children’s mutual fund schemes available, and the best performing funds have delivered annual returns of 15 to 20 percent over the past three to five years.
Experts say parents prefer these funds because they offer a mix of equity and debt, provide higher returns than fixed deposits, and encourage long term disciplined savings through a lock in period.
With rising financial awareness, digital access, and regulatory support, children’s mutual funds are expected to become a popular choice for goal based investing in the years ahead.
The category offers tax benefits and helps families build a secure financial future for their children through careful long term planning.
