How to Financially Plan for Your Child’s Education Abroad

Posted on Wednesday, April 2nd, 2025 | By IndusInd Bank

Sending your child abroad for higher education is exciting, but let’s be honest—it can also feel overwhelming. The thought of them studying at a top university in the US, UK, Canada, or Australia is thrilling, but the price tag? Not so much.

From tuition fees and accommodation to everyday expenses and travel, costs add up quickly. But here’s the good news: with the right financial strategy, you can make this dream a reality without unnecessary financial stress. Let’s break it down.

Step 1: Understand the Full Cost of Studying Abroad

Before you start planning, you need a clear picture of what you’re signing up for. Studying abroad is not just about tuition fees—there are multiple costs involved, and they vary based on the country, university, and lifestyle choices.

Major Expenses to Consider

• Tuition Fees: This is the biggest expense. It can range from ₹10 lakh per year in Germany (public universities) to ₹40-50 lakh per year in the US or UK for private institutions. Some universities also charge lab fees, student activity fees, and tech charges.
• Living Expenses: Rent, food, transport, and utilities add up. Cities like London, New York, and Sydney are expensive, while places in Germany, Canada, and New Zealand might be more budget friendly.
• Health Insurance: Many countries make this mandatory for international students.
• Travel & Visa Fees: Flights, visa processing, and local transport aren’t cheap.
• Miscellaneous Expenses: Books, gadgets, personal expenses, and unexpected emergencies should also be factored in.

Step 2: Start Saving Early with the Right Financial Tools

Knowing the costs is one thing—planning how to fund them is another. The earlier you start, the better. A well-structured savings plan can take the financial pressure off when the time comes.

Savings Account for Short-Term Goals

A high-interest savings account is a great way to start. It keeps your money liquid while earning interest, making it perfect for short-term goals. Setting up automatic monthly transfers to this account can help build a dedicated education fund.

IndusInd Bank offers a wide range of savings accounts. You can choose the one that fits your needs.

Fixed Deposits for Safe and Steady Growth

Want to keep funds safe while earning steady returns? Fixed deposits (FDs) are a solid choice. You can open multiple FDs with different maturity periods, ensuring money is available when needed—without market risks.

IndusInd Bank offers competitive interest rates on fixed deposits for different durations and amounts. You can check out pick and choose your preferred investment amount and duration as per your requirements.

Also Read: Ensure Your Child’s Education with a Fixed Deposit

Mutual Funds for Long-Term Growth

If you have time on your side, mutual funds can help grow your child’s education fund faster than traditional savings. Equity mutual funds, in particular, have the potential for higher returns over time. However, since markets fluctuate, choose funds based on your risk appetite and timeline.

You can check and analyse different mutual funds and set up SIPs for your preferred funds from IndusInd Bank’s Wealth portal.

Step 3: Explore Education Loans and Scholarships

Even with disciplined saving, you may still need additional funding. That’s where education loans and scholarships come in.

· Education Loans

Many Indian banks and NBFCs offer education loans that cover tuition, living expenses, and other study-related costs. When choosing a loan, look for:

• Low interest rates
• Flexible repayment options
• Tax benefits

· Scholarships & Grants

Encourage your child to apply for merit-based and need-based scholarships. Many universities and private organisations offer financial aid that can significantly reduce costs.

Step 4: Plan for Currency Exchange & Inflation

Exchange rates fluctuate, and tuition costs rise over time. If you don’t factor this in, you might find yourself falling short.

Managing Currency Exchange Risks

Consider using forex cards and setting up an international bank account for your child. Some banks also offer education remittance services with better exchange rates, helping you save on transfers.

Account for Inflation

The cost of education increases by about 5-7% every year. When estimating future expenses, always add inflation to your calculations to avoid last-minute surprises.

Step 5: Prepare for Visa and Other Pre-Departure Costs

Once your child gets admission, you’ll have some big payments to make before they even set foot on campus.

Visa and Processing Fees

Different countries have different visa fees and documentation requirements. Here’s a rough estimate:

1. US Student Visa (F-1): ₹14,500 (approx.)
2. UK Student Visa (Tier 4): ₹37,000 (approx.)
3. Canada Study Permit: ₹9,500 (approx.)

Travel Insurance & Medical Check-Ups

Most universities require students to have health insurance, and some countries require medical tests before granting visas. These costs should be factored into your budget.

Step 6: Ensure a Smooth Fund Transfer System

A reliable way to send money abroad is crucial. Delays or hidden charges can be frustrating—especially when tuition fees have strict deadlines.

Best Ways to Send Money Abroad

• Wire Transfers – Direct bank transfers to the university’s account.
• Forex Cards – Preloaded with foreign currency for daily expenses.
• International Bank Accounts – Some banks allow students to open accounts before they travel.

Pro Tip: Compare international fund transfer charges across banks to get the best deal and avoid high fees.

Wrapping Up!

Studying abroad is a big financial commitment, but with a solid plan, it’s absolutely doable. Start early, choose the right savings and investment tools, and explore additional funding options like loans and scholarships.

A mix of savings accounts, fixed deposits, and mutual funds can give you a strong financial foundation. Also, staying informed about currency fluctuations and inflation ensures that you’re always a step ahead. With the right approach, you can give your child the gift of world-class education—without unnecessary financial stress.