NPS Vatsalya Yojana: If you want your child to grow up without financial worries, starting their financial journey today is the wisest step. A small start of just ₹1,000 per month can make a big difference in the long term. Through the NPS Vatsalya Yojana, accounts can be opened in the name of children from newborn to 18 years of age.

And it can be operated by parents or legal guardians. Investments made in this plan gradually grow into a large corpus through compounding. This ensures a child's financially secure and strong future. You can accumulate ₹11.57 crore by investing ₹1,000 in the plan.

How will Rs 11.57 crore be deposited?

You start investing in the NPS Vatsalya scheme by depositing Rs 1,000 every month. If you start investing from the birth of your child and continue for 60 years, the total deposit will be only Rs 7.20 lakh. However, compounding will yield significant benefits.

With long-term investments that earn an average annual return of 14%, the money grows not only on the deposit amount but also on the interest earned on it. Growth is slow in the initial years, but accelerates after 20–25 years. Therefore, after 60 years, the total corpus can reach approximately Rs 11.57 crore.

How will compounding work?

Compounding means that the interest earned on your money increases year after year. As time progresses, the amount of interest also increases. Growth may seem slow in the initial years, but over the long term, this money grows rapidly.

For example, a total deposit of ₹7.20 lakh came from your contributions alone, but through time and returns, it became ₹11.57 crore. This is why starting investments at the time of your child's birth is the best strategy. The longer the time, the greater the financial growth.

These facilities are available in the plan

The NPS Vatsalya scheme also offers partial withdrawals if needed. After three years of account opening, up to 25% of the deposit amount can be withdrawn for education, medical expenses, or emergencies. This facility is available twice before the age of 18 and twice between the ages of 18 and 21.

After turning 18, the child can manage the account themselves or switch to a regular NPS. Upon exiting at age 21, at least 80 percent of the corpus must be invested in pension funds. The remaining 20 percent can be received as a lump sum. This plan builds a strong long-term financial foundation for the child and paves the way for achieving big dreams with small investments.

PC:ABPNews