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NPS Vatsalya Investment Plans: The government has recently launched the NPS Vatsalya Yojana for the financial security of children. Under this, parents or guardians of children below 18 years of age can open an account with a minimum contribution of Rs 1,000. Therefore, there is no maximum limit of investment.
Let us tell you that when the child turns 18, it will be converted into a normal NPS account. Pension will start coming from the account only when the child turns 60 years old. If you invest Rs 10,000 every year in this scheme, it will make your child a millionaire in 60 years. Know the complete calculation of return on investment.
Average Returns in NPS
Let us tell you that NPS has given an average return of 11.59 percent on investing 50 percent in equity, 30 percent in corporate debt and 20 percent in government securities. The average return of NPS has been 12.86 percent on investing 75 percent in equity and 25 percent in government securities. This return data is till July 19, 2024.
Also, the Finance Minister claims that the National Pension Scheme (NPS) has given an annual return of 14 per cent in equity, 9.1 per cent in corporate debt and 8.8 per cent in government securities.
Calculated on an annual investment of Rs 10,000
Rate of Return (%) Tenure (Years) Estimated Funds (Rs)
10 18 5,00,000
10 60 2.75 Crore
11.59 60 5.97 Crore
12.86 60 11.05 crore (Source: PIB)
Here's how you can open an account online
1. Visit eNPS.nsdl.com and click on NPS Vatsalya (Minor). Click on Register Now and fill in the guardian details.
2. Verify with OTP. Upload documents related to child and guardian information.
3. Choose the minimum investment option of Rs 1,000. On completion of the process, a Permanent Retirement Account Number (PRAN) will be generated.
These documents are necessary
1. Child's birth certificate
2. Guardian's KYC
3. Scanned copy of passport (for NRI).
4. Foreign Address Certificate (for OCI).
5. Scanned copy of bank proof (for NRI/OCI).
Know…when and how much you can withdraw
After a lock-in period of three years, you can withdraw 25 per cent of the total contributions for education, certain illnesses and disability.
This withdrawal can happen up to three times before the child turns 18 years old.
If the fund exceeds Rs 2.50 lakh, 80 per cent of the amount will be used to buy annuities. The remaining 20% can be withdrawn as a lump sum.
If the fund is Rs 2.50 lakh or less, you can withdraw the entire amount in a lump sum.
On the death of the child, the guardian will receive the entire amount.