If you want to secure the future of your children, choose this scheme of NPS, by investing Rs 834 every month..

NPS's new scheme for children
NPS is a scheme, which was launched by the Government of India in the year 2004. Its purpose is to give people a permanent and reliable income after retirement. This scheme is regulated by the Pension Fund Regulatory and Development Authority (PFRDA). If you want to secure your child's future with NPS, then it has a new scheme - the NPS Vatsalya Scheme. In this, you can create a fund of 11 crores for your child.

What is the NPS Vatsalya Scheme?

Vatsalya Scheme is a new scheme of the National Pension System (NPS). It was started in September 2024. In this scheme, parents invest in the name of their child below 18 years of age. As soon as the child turns 18, this account is converted into a regular NPS pension account. In this scheme, you can choose the investment option according to your choice. That is, you will decide for yourself how much amount will go into equity. How much amount will be invested in debt or government bonds?

How can a fund of 11 crores be created?

The money deposited in this scheme is invested in government securities, debt, and the stock market. To create a big fund through the NPS Vatsalya scheme, you have to invest only 834 rupees per month. If you calculate, it is 10 thousand rupees annually. If the retirement age is considered to be 60 years, then you can raise this much funds by continuing to invest in regular NPS. If we assume the rate of return to be 12.86%, then at the age of 18, the fund will be Rs 7.6 lakh. At the age of 60, this amount will become Rs 11.05 crore.

What are the conditions for the Vatsalya scheme?

Any Indian can invest in this scheme for his child below 18 years of age. The child must have a PAN and Aadhar card. If the fund is more than 2.5 lakhs, then an annuity (pension) will have to be purchased at 80%. 20% can be withdrawn in a lump sum. If the fund is 2.5 lakh or less, then the entire amount can be withdrawn in a lump sum. If unfortunately, something happens to the child, then the guardian will get all the money.

How much investment is to be made?

A minimum investment of 1,000 has to be made annually in the Vatsalya scheme. The maximum limit is not fixed. After 18 years, the account gets converted to NPS Tier-1. For this, you have to update KYC. You can also make pre-mature withdrawals in this scheme. After 3 years of starting the scheme, you can withdraw up to 25% of the money for studies, illness, or disability, a maximum of 3 times.

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