The NPS Vatsalya scheme, launched by Finance Minister Nirmala Sitharaman, focuses on securing the financial future of children.
It allows parents to open a pension account for children under 18 years of age with a minimum investment of Rs 1,000, with no upper limit.
Upon reaching 18 years, 20% of the fund can be withdrawn, while the remaining 80% can be used to purchase an annuity, ensuring pension benefits for the child after they turn 60.
How Much Can You Earn with NPS Vatsalya?
If you invest Rs 10,000 annually for 18 years at a 10% return, the fund will grow to Rs 5 lakh.
If held until 60 years of age, it can increase to Rs 2.75 crore. With an 11.59% return, the fund would be Rs 5.97 crore, and with a 12.86% return, it could grow to Rs 11.05 crore.
PPF: A Long-Term Government Investment
The Public Provident Fund (PPF) is another secure investment option sponsored by the government.
Under this scheme, you can invest a minimum of Rs 500 and a maximum of Rs 1.5 lakh per year.
The scheme has a 15-year maturity period and offers a 7.1% annual return. By investing Rs 1.5 lakh annually, you could accumulate Rs 1.03 crore over 25 years.
SSY: Securing a Daughter’s Future
The Sukanya Samriddhi Yojana (SSY) is designed to secure the future of girl children.
With a maximum annual investment of Rs 1.5 lakh and an 8.2% return, the total investment of Rs 22.50 lakh over 15 years would yield Rs 69.27 lakh at maturity.
Comparing the Returns
While PPF and SSY are reliable government-backed options, NPS Vatsalya has the potential to generate higher returns over the long term, making it a strong contender for those looking to build a large fund for their child’s future.
