Enroll your children in the NPS Vatsalya scheme and help them become millionaires: Every parent works hard for their children’s future. They plan to save some of their earnings and provide it when needed.
Now, we will tell you about a fantastic central government scheme that can help your children become millionaires.
Union Finance Minister Nirmala Sitharaman announced a new pension scheme in the July 2024 budget. This pension scheme is known as the NPS Vatsalya Yojana Scheme.
It is for children under the NPS and became effective on September 18. Any minor under 18 can join the scheme, and a parent or Guardian can invest in the child’s name.
What is NPS Vatsalya Yojana? NPS Vatsalya Yojana is a scheme that helps parents save for their children’s future through a pension account.
Compound interest can be a benefit of investing in it for the long term. To join the NPS Vatsalya Scheme, a deposit of at least Rs. 1000 is required, and the maximum amount can be invested.
NPS Eligibility Rules: Any minor below 18 with a PAN and Aadhaar card can open this account. Under this scheme, a minimum of Rs. 1000 should be invested initially, and any amount can be deposited.
Parents usually invest in their name as children cannot earn at that age. After the child is 18, this account is converted to a regular NPS account, with a lock-in period of 3 years. After that, 25% of the amount can be withdrawn three times.
NPS Vatsalya Calculation: Under this scheme, if you deposit at least 2.5 lakh rupees per annum in your child’s name, 80% can be used for your needs, and 20% can be withdrawn immediately. In case of death, the entire amount is transferred to the Guardian.
For example, suppose you deposit 10 thousand rupees per annum for 18 years under NPS Vatsalya Yojana, with NPS returns of 14% under equity, 9.1% under corporate debt, and 8.8% through government securities. In that case, the total investment after 18 years will be Rs 5 lakhs, with a 10% profit per annum.
NPS Interest Rate: If this amount is kept for 60 years with a 10% annual return, the total corpus will be Rs. 2.75 crores. Assuming an annual return of 11.59% based on the same financial conditions, the corpus at 60 would be Rs. 5.97 crores.
Similarly, based on a 12.86% annual return, the total corpus at 60 will be Rs. 11.05 crores. This means that crores will be given to your children by the time they reach their life goals and relax.
The following documents should be submitted: the child’s Birth Certificate, School Transfer Certificate, Matriculation Certificate, PAN, and Passport.
In addition, the Guardian should have a KYC ID and address Proof (Aadhaar, Driving License, Passport, Voter ID Card, 100 Day Scheme ID Card, and National Population Register). NRIs should have an NRE/NRO bank account.