If you want to build a financially secure future for your kid, NPS Vatsalya has no match. NPS Vatsalya is the most significant extension that the National Pension System, or NPS, has been lent by the Union finance ministry. It allows one to amass a really huge corpus of money for one’s children. In other words, it allows you to build a solid foundation for financial security for your kid long after you are gone.
An NPS Vatsalya calculator, which is available free and online, will show that a formidable pool can be created with even small contributions to this account. While announcing the roll out of NPS Vatsalya finance minister Nirmala Sitharaman had said that the government is encouraging parents/legal guardians to put their money in this scheme for the sake of their kids.
How is the NPS Vatsalya scheme calculated
Think of a lower middle-class parent who cannot afford to invest more than Rs 2,500 in the NPS Vatsalya scheme. Let the kid be born on January 1, 2004. Also, assume a situation where the parents are not in a position to raise the monthly contribution. The NPS Vatsalya calculator will tell you that at this rate the scheme will generate a total return of Rs 15,04,773 when the kid turns 18. Now, assuming the kid keeps investing the same amount till the age of 60, the scheme will generate a total return of Rs 10,01,48,941 or Rs 10.04 crore.
The amount will jump to Rs 17,74,52,814 or Rs 17.74 crore if first the parents and later the son/daughter can step up the monthly investment by only 2% annually.
Is NPS Vatsalya good or bad
NPS Vatsalya is a brilliant tool that allows for decades of investments to multiply. Even small amounts can create a huge pool. The National Pension System was introduced in January 2004 and is a voluntary contribution scheme. It has been designed to help every Indian, irrespective of whether he/she is employed or not, to pave the way for financial independence in his/her old age. It envisages paying a pension from the age of 60 and a lump sum. What’s more significant is that NPS allows an individual to choose between modes of investment depending on his/her risk appetite and requirement of funds in old age.
NPS Vatsalya packs Herculean compounding power. It enables one to harness that power from the first year of a kid which can actually be tapped till that kid becomes a septuagenarian!!! Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
