Saving for your children’s education

Paying for a degree is usually the largest single cost an NRI family plans for, and it is harder across borders. You may not know which country your children will study in, or where you will live when they do, and the plans that carry tax benefits are tied to the country that offers them. This guide explains the main plans in the countries with the most NRI families, what happens to each if you move, and the Indian side. It explains how they work; it does not tell you which to choose.

Start with the likely cost. Our degree cost planner estimates fees and living costs in the main study countries, and our guide to master’s and MBA programmes abroad covers the later step.

UK: the Junior ISA

A Junior ISA is a savings or investment account for a child under 18 who lives in the UK. Interest and growth are free of UK tax. Anyone can pay in, up to a yearly limit, which was £9,000 for 2025-26; check gov.uk for the current year. The money belongs to the child and is locked until 18, when it becomes theirs to use as they choose, for university or not.

If the family leaves the UK, the account usually stays open, and gov.uk says you can still add money even after your child moves abroad, though your provider can set its own terms. You cannot open a new Junior ISA for a child who already lives abroad. Our ISA vs India calculator compares the adult ISA with Indian deposits for UK NRIs.

US: the 529 plan

A 529 plan is a US savings plan for education. Growth is usually free of federal tax when the money is spent on qualified education costs, and many states add their own tax benefit. Some universities outside the US qualify, if they take part in US federal student aid programmes. If the money is taken out for something else, the growth is usually taxed and an extra 10% tax is added, with exceptions.

The account owner, usually a parent, keeps control and can usually change the beneficiary to another family member. If the family leaves the US, the account can usually stay open. US citizens and green-card holders remain taxable in the US wherever they live, so the plan’s tax benefit continues for them; for others, ask an adviser before you leave.

Canada: the RESP

A Registered Education Savings Plan grows free of tax until the money is withdrawn for study. Its main attraction is the government grant: the Canada Education Savings Grant adds 20% of the first C$2,500 contributed each year, up to C$500 a year and C$7,200 in a lifetime, and lower-income families can get more.

The grant depends on residence. The child must be resident in Canada when the money goes in for a grant to be paid. If the family leaves Canada, sources say that payments to a child who is no longer resident cannot include the grants, which go back to the government, and that Canadian tax is withheld on the growth. Check with your plan provider before you move.

The Indian side

While you are an NRI, India does not tax your income from abroad, so a Junior ISA, 529 or RESP has no Indian tax to pay. If you move back to India and become resident, India can tax the income from these plans, and while your child is a minor, that income is usually added to a parent’s income. Foreign accounts and their income also go on your Indian return once you are fully resident. India does not usually recognise the tax benefits these plans have in their own country, so a plan that is tax-free in the US or UK may not be in India. Our guide to moving back to India explains when this starts.

Indian options. Many NRI families also save in India, especially if the children may study there. NRE fixed deposits pay interest free of Indian tax, though the country you live in may tax it. Mutual funds are open to most NRIs, with limits for those in the US and Canada. Sukanya Samriddhi, the scheme for girls, and PPF are designed for residents: an NRI usually cannot open a new account, and the rules for an existing account when a child or parent becomes non-resident are worth checking with the bank or post office.

Which currency to save in

The plan matters less than the currency. If your child is likely to study in the UK, fees and rent will be in pounds; in the US, in dollars. Saving in rupees for a degree paid in pounds adds currency risk: over long periods the rupee has usually lost value against the major currencies, which makes the fees cost more in rupees each year. The reverse holds for a degree in India. Our growth calculator shows how a monthly saving might grow at a rate you choose; the rate is an assumption, not a forecast.

Paying fees from India

If grandparents or other family members in India pay fees abroad, they send the money under the Liberalised Remittance Scheme, which is for residents of India. Above ₹10 lakh in a financial year, the bank usually collects tax at source: 2% of the excess for education paid from savings since 1 April 2026, and nothing when the payment comes from a qualifying education loan. This is a prepayment of the payer’s own tax, claimed back in their return. The TCS calculator works out the amount.

Points to settle early

• Where your children are most likely to study, and in which currency the fees will be.
• Whether you expect to stay where you live, move to another country or return to India before they start.
• Who owns each account: a Junior ISA belongs to the child; a 529 and an RESP stay under the parent’s control.
• Keeping the plan documents and contribution records, which you will need if you move.

This guide explains how the plans usually work. Tax treatment depends on where you and your children live when the money grows and when it is spent, so before a large commitment or a move, take advice from a tax adviser who knows both countries.