NPS Vatsalya: In today’s times, the biggest concern for parents is their children’s education, career, and financial security. Keeping this need in mind, the government has launched the NPS Vatsalya scheme. Under this scheme, parents can open a special pension account in their child’s name, which they can operate themselves.
The NPS Vatsalya account is opened directly in the child’s name, but it is managed by the parents or guardians. The investment made in this account remains linked to the market for a long period, providing the benefit of compounding. This means that even small savings can grow into a large fund over time, which can later help with the child’s higher education, business, or other important needs.
Read Here: ICC Under 19 World Cup 2026 – “Vaibhav Suryavanshi Creates History, Scores Century in Just 36 Balls
When can you invest in your child’s name?
When the child turns 18, this account can be converted into a regular NPS account. Parents can also choose to exit the scheme at this age. However, the condition in this case is that at least 80% of the maturity amount must be invested in an annuity plan, while only 20% can be withdrawn as a lump sum.
The biggest advantage of this scheme is that it creates long-term financial security for the child. Regular investments build a strong fund for the future and also cultivate a habit of investing in oneself. This fund can later become the basis for the child’s education, business, or retirement planning.
An account can also be converted to a regular NPS account
The NPS Vatsalya scheme also reduces the financial responsibilities of the parents. When the child grows up, a large corpus will already be available in their name. At the age of 18, the account can be converted to a regular NPS account by updating the KYC. If the total amount is less than Rs 2.5 lakh, the entire amount can be withdrawn, making both the parents’ planning and financial planning easier.
Read Here: RPSC RAS Recruitment 2023 Marks Released : Check Scorecard on Official Website rpsc.rajasthan.gov.in
Learn how much money you can accumulate
Let’s say you invest Rs 10,000 every year in your child’s name. If this investment continues for 18 years and earns an average return of 10%, a fund of approximately Rs 5 lakh can be created by the time the child turns 18. Continuing the investment after that can multiply this amount significantly. If the same investment is continued for 60 years, the corpus could reach approximately Rs 2.75 crore at a 10% return. At an 11.59% return, this amount could be Rs 5.97 crore, and at a 12.86% return, the investment could grow to Rs 11.05 crore.
Adarsh P
Adarsh Pal is a content writer at Timesbull Media. He specializes in writing news related to industry updates, the automotive sector, banking, telecommunications, the travel sector, and personal finance. Adarsh has previously worked with several digital media channels. He is skilled at presenting news accurately and disseminating information based on...
Related Stories
Gadgets
latest news
Education
Entertainment
Education
Business
Gadgets
India
Business
Auto