NPS Vatsalya Calculator: How your Rs 1,000 monthly contribution can help your child get Rs 15.10 crore at retirement; see calculations
NPS Vatsalya Calculator: Indian citizens, non-resident Indians, and Overseas Citizens of India are eligible for the NPS Vatsalya account. Parents/guardians can open the account on behalf of minors. The minor will get a Permanent Retirement Account Number (PRAN) and the account will also be in their name.
NPS Vatsalya Calculator: National Pension System (NPS) is now open to minors under the name of NPS Vatsalaya. Parents or guardians on behalf on minors can open an NPS Vatrsalya account. They can contribute monthly and lump sum bases in the account. They can keep up to 75 per cent equity exposure, where the expected return can be 13 per cent. When the minor turns 18, the account will be converted into a normal NPS account. The years of compounding can help them build a large corpus for their retirement. In this write-up, we will show how a Rs 1,000 monthly investment can help your child build an over Rs 15 crore corpus for retirement.
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What is NPS Vatsalya?
The government allowed minors' entry into NPS last month. Children from 0-18 years are allowed to have an NPS Vatsalya account.
NPS Vatsalya: Who can open account
Indian citizens, non-resident Indians, and Overseas Citizens of India are eligible for the NPS Vatsalya account. Parents/guardians can open the account on behalf of minors. The minor will get a Permanent Retirement Account Number (PRAN) and the account will also be in their name.
NPS Vatsalya: Minimum and maximum contribution
The minimum investment in the NPS Vatsalya account is Rs 1,000, while there is no maximum limit. The investment can also be done on a monthly and lump sum bases.
NPS Vatsalya: Years for contribution
From 0-18 years
NPS Vatsalya: Minimum and Maximum equity exposure
The minimum equity exposure is 25 per cent and the maximum is 75 per cent.
NPS Vatsalya: What will happen to account then?
Once the child turns 18, the NPS Vatsalya account can be converted into a normal NPS account, where anyone can contribute from the age of 18 to 75.
NPS Vatsalya: Can all corpus be withdrawn at 18?
Only 20 per cent corpus can be withdrawn at 18. From the rest of the 80 per cent corpus, they need to purchase annuity to get monthly income. They can withdraw all corpus if it is less than Rs 2.50 lakh.
NPS Vatsalya: How to create Rs 15.10 crore retirement corpus
The corpus can be created in 2 stages. In the first stage, Rs 1,000 monthly investment till 18, then convert into a normal account and continue investment till 60.
NPS Vatsalya: Retirement corpus at Rs 1,000/m investment from 0-18 years
At Rs 1,000 per month, the investment till 18 will be Rs 2,16,000, the estimated gains will be 5,75,886, and the estimated corpus will be 7,91,886.
NPS Vatsalya: Retirement corpus at Rs 1,000/m investment from 0-60 years
At Rs 1,000 per month, the investment till 60 will be Rs 7,20,000, the estimated gains will be Rs 15,01,76,712, and the estimated corpus will be Rs 15,08,96,712.
What will happen at 60?
As per the current NPS rule, one can withdraw up to 60 per cent retirement corpus, and need to purchase annuity from the rest of the 40 per cent amount.