Kolkata: NPS Vatsalya is a savings instrument that enables an individual to invest over as long as six decades — quite an incredible period. Suppose a couple decides to opens an NPS Vatsalya account for their kid from the very first year. They can continue investing till their son/daughter turns 18 or when he/she starts earning and can invest money from his/her own earnings. The “kid” now continues the investment till he/she turns 60. It is difficult what can be the amount in the account if someone shows this financial discipline.
NPS Vatslaya was an extension of the NPS (National Pension System). Nirmala Sitharaman announced it on 23 July 2024, in her Union Budget 2024 speech and launched the scheme on 18 September last year. She mentioned that one of the key objectives of the scheme was to inculcate a habit of long-term disciplined investing by parents.
NPS Vatsalya calculator: Check corpus with Rs 20 a day
One can easily take the help of an NPS Vatsalya calculator and type in a few simple figures to find out how much can one amass. Let’s assume the following:
- Date of birth of the child: January 1, 2025
- Contribution type: Annual
- Yearly contribution: Rs 7,300 (at the rate of Rs 20 a day)
- Annual increase in contribution: Nil
- Return on investment: 12%
With these assumptions, the NPS Vatsalya calculator will tell you — hold your breath — your child can get more than Rs 6 crore by the time he/she turns 60. The calculator will show the following:
- Total investment from the pocket of the parents/kid: Rs 1,31,400
- Corpus at age 18: Rs 4,55,810
- Corpus at age 60: Rs 6,10,88,138 (or Rs 6.10 crore)
NPS Vatsalya rules state that when the child turns 18, he/she can withdraw up to Rs 2.5 lakh as a lump sum amount. However, for best results, one shouldn’t withdraw any fund at 18 and let the accumulation continue.
Is NPS Vatsalya a good investment: Check corpus with 10% returns
The 12% return is a template expectation built in inside the NPS Vatsalya calculator. Even with 10% returns, the calculation can be impressive. In that case a corpus of Rs 2,43,69,576 can be built when your kid turns 60. The morale of the story: If you want to create financial security for your child, open an NPS Vatsalya account as early as possible and invest with utmost discipline.
NPS Vatsalya Calculator: The power of compounding over the very long term can create incredible numbers. Take NPS Vatsalya for instance, which can create a corpus of a few crores of rupees comfortably when your kid turns a senior citizen provided you keep investing the princely sum of Rs 20 a day from the very first year. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
