NPS Vatsalya- If you develop the habit of saving in your children right now, then in the future it will not only be helpful for the children but also for you. Keeping in mind the idea of saving in children, the Government of India has introduced a special scheme. This scheme will have many great benefits. It is very easy to start investing under this scheme. There are many great benefits of investing in it. Come, let us know these things here.
What is NPS Vatsalya Scheme?
NPS Vatsalya Scheme is a pension scheme designed for minors. It has been launched in July 2024. It allows parents or guardians to open a Permanent Retirement Account Number (PRAN) so that their child can create a retirement fund over time. Contributions made to the account opened under this scheme are invested in different asset classes such as government securities and equity etc. This helps in increasing the fund through compounding in the long term. Under this scheme, the main objective is to create financial security by developing disciplined savings habits in minors.
The NPS Vatsalya scheme enables parents to build a strong retirement fund for their children. This ensures that they have a solid financial security when they become adults. According to protean, by starting early, parents can gradually accumulate funds over the years, so that the fund can grow through long-term investment. This provides financial security to the child for higher education, unforeseen circumstances or retirement in the future.
NPS Vatsalya Yojana is very accessible. The scheme allows a minimum contribution of Rs 1,000 every year, making it viable for families from all financial backgrounds. There is also no upper limit on contributions in these schemes. You can invest as much as you want. This offers flexibility for parents who want to contribute more to secure their child’s future.
NPS Vatsalya acts as a financial safety net for children. It provides financial stability even in challenging times. Be it the untimely death of parents or sudden financial difficulty, contributions made to the NPS Vatsalya scheme ensure that the child’s future is secure. You also get a good return on the amount deposited in NPS Vatsalya Yojana. If we talk about long term in this scheme, then a return of about 9.15% to 10% is expected. Not only this, if needed, you can also withdraw some part of the amount invested in this scheme. Like you can withdraw up to 25% of the money for studies or for any emergency situation. You are also given tax exemption in the scheme.
This much money will be accumulated by the age of 18
If we assume an average annual return of 10% in NPS Vatsalya Yojana, then according to this, if you deposit 15 thousand rupees every month for 15 years for a 3-year-old child, then by the time he turns 18, approximately Rs 60,24,318 will be deposited in his account at the rate of 10% average return. Which will be a decent amount.
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