Got ₹10 lakh for your 5-year-old daughter? Experts explain how to invest it wisely to secure her future

A ₹10 lakh corpus today for a 5-year-old daughter can be of immense value if invested wisely for her future. All it requires is a proper understanding of the fundamentals of investing, the value of time and compounding, and clarity on long-term economic objectives for the girl child.

With about 13 to 15 years before she graduates, her parents have ample time to plan for her future studies and even for marriage. Still, this planning requires strategic thinking, professional guidance, and purposeful structure rather than parking funds in one instrument or the other.

This write-up discusses the views of prominent market participants and investment professionals to help parents better understand and plan for their daughter’s future financial well-being.

Significance of building the right portfolio mix

When planning investments for a child with a ₹10 lakh corpus, it is wise to focus on a diversified portfolio. Such an elaborate approach can help investors plan their investments more effectively.

Rishi Mathur, Chief Distribution Officer-Alternate Channels and Chief Marketing Officer, Canara HSBC Life Insurance, explained this in detail. “For a five-year-old daughter, ₹10 lakh should be designed as a portfolio, not parked in a single product. The first layer must protect the parents’ earning power through adequate term insurance. The remaining corpus should balance market-linked growth with guaranteed, long-term savings, aligned to milestones such as higher education. The value of a product lies in the role it plays. Protection, growth and certainty must work together—and evolve—as the child’s ambitions take shape,” Mathur said.

Nikunj Saraf, CEO, Choice Wealth, added a horizon-first view. “For a five-year-old, the investment horizon stretches 13 years to graduation and beyond—so time, not timing, is the real advantage. I would deploy around 65–70% of the ₹10 lakh into diversified equity and index funds, staggered through an STP to smooth out entry risk and let compounding work. For stability and a girl-child edge, route ₹1.5 lakh annually into Sukanya Samriddhi Yojana, currently offering a tax-free 8.2%. Stay invested, rebalance yearly, and shift to safer assets as she nears 18,” Saraf opined.

This highlights the importance of having small savings schemes, diversified equities, and index funds in the investment portfolio to propel growth for the girl child as she grows.

What ₹10 lakh could become

Kapil Makhija, COO at MinEMI, framed the choice in concrete numbers: “Rather than asking which product, ask what ₹10 lakh becomes in 20 years under each. In a fixed deposit at 7%, it grows to about ₹39 lakh. In gold at its long-term 9%, about ₹56 lakh. In Sukanya Samriddhi at today’s 8.2%, roughly ₹48 lakh, though deposits are capped at ₹1.5 lakh a year. In equity mutual funds at 12%, close to ₹96 lakh.”

He further added, “I would also keep one slice in assets that pay along the way, not only at the end. Listed REITs let a family own commercial office space in small lots, earn rent as quarterly payouts, and still hold a growing asset. Use Sukanya Samriddhi as the floor and equity as the engine, because time in equity is what a five-year-old has in abundance.”

These views showcase how different asset classes can perform in the long run, providing investors with insights into how to devise their investment strategies.

Echoing a simpler, actionable split, Adhil Shetty, CEO, BankBazaar, suggested, “An optimal strategy to invest would be a structured 70:30 asset split. Allocating ₹7 lakh into diversified equity mutual funds captures strong compound growth over a fifteen-year period, while investing ₹3 lakh in a government-backed girl child savings scheme ensures guaranteed, tax-free safety. This balanced approach combines high-return potential with absolute capital security for the child’s future education.”

It can be said that, across all views, one core theme holds: Equity investments for growth, Sukanya Samriddhi Yojana investments at 8.2% for safety, and the value of term insurance protection for parents in order to protect the future of the child holistically, even in case of an adverse life event for the parents of the child. An investment strategy structured this way can have a transformative impact and help create meaningful wealth for the girl child as she prepares for a prosperous future.

Disclaimer: The views and investment recommendations expressed in this article are those of individual experts and do not constitute financial advice. Mutual fund investments are subject to market risks. Readers are advised to consult a certified financial advisor before making any investment decisions based on their personal financial goals and risk appetite.