Hello friends, do you want to start a super savings for your child’s future right now? Do you know about the central government’s scheme that can start from just ₹1000 per year? You must have seen the YouTube thumbnail, “Your child’s pension” or something like that. “Pension for my child? “Don’t think about anything like that. Because compound interest—the power of compounding—is the NPS Vatsalya scheme that can change your child’s future.
What is NPS Vatsalya Scheme?
Recently, the Union Minister, that is, the Union Finance Minister, introduced this NPS Vatsalya scheme, which is a pension scheme for children who are below the age of 18. In this, the parents, or the guardian, may have come and deposited this amount of ₹1000 in the name of that child. When the child turns 60, this pension money will go to that child.
NPS Vatsalya Scheme Key Features
Now everyone may think, “Now it’s okay if my child gets some money or some benefit; when my child turns 60, he won’t spend much on anything, so what will happen if he gets that pension money?” You may think like that. You don’t think like that; they say that the ₹1000 you invest will protect your two generations.
The Central Government also claims that if you invest ₹1000, you will get returns in crores. There is no need for any hesitation; this is a Central Government scheme. Everyone knows that there is a pension scheme for adults, that is, for those above 18 years of age, the Central Government Scheme—NPS. Under that NPS, this is also a pension scheme for children, and they have introduced a scheme called NPS Vatsalya.
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So, if you deposit in this NPS Vatsalya scheme till the age of 18, after the age of 18, the child’s normal NPS account will be converted to a normal NPS account. After that, the child can follow his account. Your son or daughter can change our NPS account in their name and follow it. If you deposit in their name till the age of 60, then after the age of 60, you will get big returns from that one return.
NPS Vatsalya Scheme Benefits: Power of Compounding
Having said that, we will also tell you what the qualifications required to join this scheme are. You can join this scheme with a minimum of ₹1000. There is no maximum amount that you can invest, so you can invest as much as you want. The minimum amount that you deposit is ₹1000. You can do this regularly every month. You can follow this till the child, i.e., your son or daughter, turns 60.
Do you know why I call this scheme super? For example, let’s say that when your child is three years old, you invest 50,000 per year, i.e., 4,000 per month. You are committed until the age of 18. Moreover, if your child does not withdraw any of that money and your son or daughter continues that account until the age of 60, then this is through compound interest, that is, the interest they get through this, that is, the benefit. If you look at it, then after the age of 60 they will get a return of several crores and so on.
NPS Vatsalya Scheme Withdrawal Rules
We deposit money, but can we withdraw it? Some people ask questions like that. Generally, you cannot withdraw that money until the age of 18. They say that there is a lock-in period. But if you need any money for your child’s education or emergency hospitalization, then after three years you can come and withdraw 25% of the money you deposited. You can come and withdraw it three times like this. You cannot take more than that; the lock-in period is the lock-in period.
What happens when the child turns 18? In this scheme, the NPS Vatsalya account will be converted to an NPS Tier-1 account. That is, from the NPS Vatsalya scheme for children, the Normal Human Pension Scheme, the account will automatically be shifted to that pension scheme. They say that this is the reason why they get such high returns. After that, your child can continue to earn from their earnings.
An important note is that if you want to withdraw the entire amount at the age of 18, they will give you only 20% of the money. The remaining 80% will be put in the pension plan. So, you will get this benefit only if you invest it for a long time.
Eligibility & Documents for NPS Vatsalya Scheme
The next question is where can you open this account? You can open this account at any SBI, HDFC, ICICI, or post office and on a website like e-NPS. Just bring your Aadhar card and PAN card. You can. The child will not get any Aadhaar card or PAN card. If you see the child, now they have been holding that Aadhaar card for more than nine months. So, they say that you can open that account by bringing his Aadhaar card, birth certificate, etc.
If you have any doubts, do not forget to comment below. I hope this information will be useful for you. If you have money, then please invest ₹1000 every month. Whether this investment is useful for your son or daughter or not, it will definitely be useful for your grandson or granddaughter. The ₹1000 investment you make will protect the next two generations.