What Is the NPS Vatsalya Scheme?
Launched in September 2024, the NPS Vatsalya Scheme is a child-centric version of the National Pension System. Unlike traditional pension schemes, Vatsalya allows parents or guardians to open an NPS account in the name of a child under 18 years of age. Upon turning 18, the account is automatically converted into a regular NPS Tier-1 account.
One of the most attractive aspects of the scheme is investment flexibility. Parents can choose how their contributions are allocated between equities, debt instruments, and government securities — tailoring the risk-reward ratio based on their own financial planning.
How ₹834 a Month Can Grow to ₹11 Crore
The true power of this scheme lies in compounding returns. By investing just ₹834 monthly — approximately ₹10,000 annually — and assuming a long-term average return of 12.86%, parents can accumulate nearly:
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₹7.6 lakh by age 18, and
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A staggering ₹11.05 crore by age 60.
This means that even modest, disciplined savings from early on can transform into a life-changing financial asset for your child, all with no market gambling or excessive risk.
Key Eligibility and Conditions
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Only Indian citizens can enroll in the scheme.
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The child must be under 18 years old at the time of account creation.
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Both Aadhaar and PAN cards are required for KYC and identification purposes.
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Minimum contribution: ₹1,000 per year. No upper limit on investment.
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If the accumulated corpus exceeds ₹2.5 lakh, 80% must be used for an annuity (pension) upon maturity, while 20% can be withdrawn in lump sum.
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If the total is under ₹2.5 lakh, it can be withdrawn entirely.
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In case of the child’s untimely death, the full amount will be returned to the parent or legal guardian.
Early Withdrawals: Conditions Apply
Though NPS is a long-term plan, partial withdrawals are allowed after 3 years for specific emergencies such as:
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Higher education expenses
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Treatment for critical illness
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Disability-related requirements
Up to 25% of the total corpus can be withdrawn under such circumstances, and this can be done up to three times during the policy term.
A Smart Investment for a Secure Tomorrow
Children’s futures require more than just good schools — they need strong financial planning to ensure they are equipped to face every phase of life. The NPS Vatsalya Scheme offers a risk-free, government-backed investment opportunity to build a substantial retirement or support fund for your child, with full transparency and long-term security.
With minimal monthly savings and the power of compounding, you can ensure that your child enters adulthood with confidence — and exits it with comfort. It’s time to turn a few hundred rupees each month into crores of opportunity for your child’s life journey.
Author Profile
- My name is Kuldeep Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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