By Admin 
NPS Vatsalya Yojana: If you want your child to grow up and be free from money worries. So starting your financial journey from today itself is the wisest step. A small start of just Rs 1000 a month can make a big difference in the long term. Through NPS Vatsalya Yojana, accounts can be opened in the name of children from newborn to 18 years of age.
And parents or legal guardians can operate it. The investment made in this scheme gradually turns into a big corpus with the help of compounding. This makes the future of the child financially secure and strong. You can collect Rs 11.57 crore by investing Rs 1000 in the scheme.
How will Rs 11.57 crore be deposited?
You start investing in NPS Vatsalya Yojana by depositing Rs 1000 every month. If this investment is started after the birth of the child and continues for 60 years, then the total deposited amount will be only Rs 7.20 lakh. But compounding will be very beneficial.
By getting an average return of 14 percent annually on long-term investment, money grows not only on the deposited amount but also on the interest earned on it. Growth seems slow in the initial years. But it picks up speed after 20–25 years. Therefore, after 60 years the total fund can reach approximately Rs 11.57 crore.
How will compounding work?
Compounding means that the interest received on the money you invest also starts increasing in the next year. As time progresses. The amount of interest also increases. Growth seems slow in the initial years. But in the long term this money starts increasing rapidly.
For example, the total deposit of Rs 7.20 lakh came only from your contribution but due to time and returns it became Rs 11.57 crore. This is why starting to invest at the time of child’s birth is the best strategy. Because the more time, the more financial growth is seen.
These facilities are available in the scheme
NPS Vatsalya Yojana also has the facility of partial withdrawal if needed. After three years of account opening, up to 25 percent of the deposited amount can be withdrawn for studies, medical or emergency. This facility is available twice before 18 years and twice between 18–21 years.
After 18 years, the child can operate the account himself or shift it to regular NPS. On taking exit at 21 years, at least 80 percent of the amount has to be invested in pension. The remaining 20 percent can be received as lump sum. This scheme creates a strong long-term financial foundation for the child and opens the way to achieving big dreams with small investments.
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