NPS Vatsalya is a special pension plan for Indian children aged 0-18. Parents can open an account for their children, giving them a head start on saving for retirement. Let’s see how your child can build a massive Rs 100 crore retirement fund by the time they are 60 years old. 

NPS Vatsalya scheme?

NPS Vatsalya is a special savings plan for kids in India that helps them prepare for retirement. It’s managed by PFRDA ((Pension Fund Regulatory and Development Authority), a government agency, and teaches kids good financial habits from a young age.

Who is eligible for NPS Vatsalya scheme?

All minor citizens/children (till 0-18 years of age) are eligible.

Who can operate NPS Vatsalya account?

The Account can be opened in the name of a minor and operated by Parent/Guardian. Minor to be the sole beneficiary.

What is minimum contribution in NPS Vatsalya?

The minimum contribution amount is Rs 1000, and there is no maximum limit. 

Where can you open NPS Vatsalya account?

NPS Vatsalya account can be opened through a Point of Presence (POP) registered with PFRDA either online or in physical mode, which includes major banks, India Post, Pension Fund, etc. 

What are the documents required to open NPS Vatsalya account?

• Date of Birth proof of the Minor (Birth certificate, School leaving certificate, Matriculation Certificate, PAN, Passport)
• KYC of the parent/Guardian shall be carried out by submitting Proof of Identity and Address (Aadhaar, Driving License, Passport, Voter ID card, NREGA Job Card, National Population Register)
• Permanent Account Number (PAN) of the parent/Guardian

Investment option in NPS Vatsalya

NPS Vatsalya in India offers two kinds of investment options to investors, active choice investment and auto choice investment. Here, we will go with the active choice. 

What is the next step after the child turns 18?

• They will be shifted to NPS Tier – I 
• A fresh KYC of the minor will be done within three months from the date of attaining 18 years. 

NPS Vatsalya: What will be your monthly investment to generate Rs 100 crore retirement corpus?

Your monthly investment will be Rs 5,500.

NPS Vatsalya: What will be your retirement corpus with monthly investment of Rs 5,500

We have used the official NPS calculator to do the calculations. We have taken 6.75 per cent annualised return, and a step up of 5 per cent (annually).
If you invest Rs 5,500 monthly in the scheme. By the time your child turns 60 years old, they will have a retirement corpus of Rs 100 crore. Let’s break the calculation for better understanding. 

NPS Vatsalya: What will be your retirement corpus?

The total investment will be Rs 2,33,36,525, the estimated capital gains will be Rs 98,40,14,537, and the maturity amount will be Rs 1,00,73,51,062.

NPS Vatsalya: What will be your child’s monthly pension?

The monthly pension will be Rs 22,66,540. 

(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)