Parents are often careful when it comes to investing in their children’s future. With various schemes available in the market, it can be confusing to decide where to invest.
The recent NPS Vatsalya Scheme, launched by the central government, is aimed at securing the future of children.
Additionally, mutual funds have long been considered a way to invest for the long term. The question arises: Which of these two investment options is better?
The NPS Vatsalya scheme is a pension scheme designed for parents who want to secure their children’s future. It allows investments in children’s names and helps create long-term wealth.
The minimum contribution for this scheme is only Rs 1,000 per year. On the other hand, children’s mutual funds are also intended to create long-term wealth, with a lock-in period of at least five years or until the child reaches puberty. The minimum investment for mutual funds is only Rs 100 per month.
When it comes to choosing between NPS and mutual funds, it’s important to consider the different investment opportunities they offer. NPS invests in equities, corporate bonds, and government securities based on the advice of economists.
On the other hand, mutual funds empower investors to choose funds based on their risk tolerance, with equity funds offering high risk but the potential for high returns. This flexibility can make parents feel more in control of their investment decisions.
Both NPS and mutual funds are good choices for creating wealth in the long run. Regardless of which option you choose, the potential for long-term wealth creation should make you feel optimistic about your children’s future. The decision on which to choose should be based on your financial goals and risk tolerance.