Every parent dreams of a life where their child doesn't have to face financial worries - not just during education or marriage, but even during old age. What if you could take a small step today and ensure that your child retires with crores in hand?
With the NPS Vatsalya Scheme, this is not just possible - it's practical. A simple monthly investment of ₹1,000 can help your child build a massive fund of over ₹2.3 crores and receive a pension of ₹1 lakh per month after retirement. Here's how it works.
The NPS Vatsalya is a government-backed retirement scheme launched under the National Pension System (NPS) framework. It is designed for children and managed by the Pension Fund Regulatory and Development Authority (PFRDA).
Parents or guardians can open this account for children below 18 years of age and start investing for a secure financial future - not just for education or marriage, but for their retirement.
Any parent or legal guardian of a child (aged 0 to 18) can open the account.
Investments are made in the child's name.
Parents manage the account until the child turns 18.
Once the child reaches 18, they take full control of the account.
Minimum investment: ₹1,000 per month.
Maximum investment: No upper limit.
Ideal for SIP-style savings for long-term wealth creation.
Let's break it down with real numbers:
You begin investing ₹1,000/month from your child's birth to age 18.
Once your child turns 18, they continue investing ₹1,000/month till age 60.
Here's the magic:
Total investment: ₹7.2 lakh (over 60 years).
Assumed annual return: 10%.
Total corpus at age 60: ₹3.84 crore.
Of this, ₹3.77 crore is just interest earned!
Under NPS rules:
At least 40% of the corpus must be invested in an annuity.
So, ₹1.53 crore goes into an annuity plan.
Remaining ₹2.30 crore is available as a lump sum.
Monthly pension (assuming 8% return on annuity): ➡️ ₹1,02,618 per month for life!
You can open the NPS Vatsalya account at:
Major banks across India
Post offices
Online via the eNPS portal
The account is regulated by PFRDA, ensuring transparency and safety.
Even a small monthly investment grows exponentially over decades.
Allowed 3 times before the child turns 18.
Must maintain the account for at least 3 years.
Can withdraw up to 25% of the contribution for:
Education
Medical treatment
Disability (up to 75%)
Child can exit the scheme at 18 if desired.
Must reinvest 80% of corpus into an annuity.
Can withdraw 20% as a lump sum.
If the total corpus is less than ₹2.5 lakh, full withdrawal is allowed.
Power of compounding: The earlier you start, the bigger the corpus.
Build your child's retirement security - not just immediate goals.
Beat inflation and rising living costs with disciplined, long-term savings.
Ensure your child is financially independent, even in old age.
While most parents save for their child's education or marriage, very few think ahead to their retirement. But with NPS Vatsalya, a simple ₹1,000/month investment could gift your child a stress-free, financially strong life after 60 - with both wealth and a steady pension.
It's never too early to plan ahead. Secure your child's future, one rupee at a time.
Every parent dreams of a future where their child doesn't struggle the way they did. While most plan for education and marriage, few think ahead to their child's retirement. But imagine if you could secure that too - with just ₹1000 a month. Yes, that's possible through the NPS Vatsalya Scheme.
NPS Vatsalya is a special initiative under the National Pension System (NPS), regulated by the Pension Fund Regulatory and Development Authority (PFRDA). It's designed for children under 18, helping them build a massive retirement corpus with minimal monthly investment.
Parents or legal guardians can open the account in the child's name.
The account is managed by parents until the child turns 18.
Once the child turns 18, they take full control and continue contributions.
Here's a simple example:
From Birth to 18 Years: Parents invest ₹1000/month.
From Age 18 to 60: The child continues investing ₹1000/month.
Total Investment: ₹7,20,000 over 60 years Assumed Return: 10% annually Final Corpus at 60: ₹3.84 Crores Interest Earned: Over ₹3.77 Crores
As per NPS rules:
40% of the final corpus goes into annuity purchase.
This ₹1.53 Crore in annuity can fetch approx. ₹1,02,618 monthly pension (at 8% annuity rate).
The remaining ₹2.3 Crores remains as a retirement corpus.
|
Feature |
Details |
|
Minimum Monthly Deposit |
₹1000 |
|
Maximum Limit |
No upper limit |
|
Partial Withdrawal |
Up to 3 times before age 18 (for education, illness, etc.) |
|
Exit Option at 18 |
Yes - 80% must go into annuity if exiting early (unless under ₹2.5 lakh) |
|
Where to Open |
Major banks, post offices, or eNPS platform |
At 18, the account automatically converts into a regular NPS account. The child must:
Complete fresh KYC within 3 months.
Choose to continue investing or exit (with certain conditions).
With ₹1000/month - less than a daily cup of coffee - you can secure not just your child's present but their entire future. NPS Vatsalya is one of the most powerful yet underutilized schemes for long-term wealth building and retirement planning.