If you’re looking to build a large financial corpus for your child’s future with a minimal monthly investment, the NPS Vatsalya Scheme—launched by the Government of India—could be an ideal option. By investing just ₹10,000 annually (or about ₹834 per month), your child could potentially accumulate up to ₹11 crore by retirement age.What is the NPS Vatsalya Scheme?
The NPS Vatsalya Schemeis a child-focused extension of the National Pension System (NPS), introduced in September last year. It allows parents to open an account in their child’s name (below 18 years of age), making long-term investments for their financial security.
- Minimum investment: ₹1,000 per year
- No maximum limit on contributions
- Once the child turns 18, the account automatically converts into a standard NPS Tier-1 account.
How Does the Investment Work?
The funds in this scheme are invested across government bonds, debt instruments, and equities. Parents can choose the allocation based on their risk appetite:Aggressive – 75% in equities (high risk, high return)Moderate – 50% in equities (balanced risk and return)Conservative – 25% in equities (low risk, low return)
You can also opt for Active Choice to customize the equity-debt ratio as per your preferences.How Can It Grow to ₹11 Crore?
If you invest ₹10,000 annually (just ₹834 per month) starting from your child’s early years and continue contributing until their retirement age (60), the corpus can grow significantly—up to ₹11 crore