Investment Planning via NPS Vatsalya: How to multiply your Rs 8.3 crore retirement corpus by nearly 5 times with this step; see calculations

NPS Vatsalya: Who can open account

Parents/guardians on behalf of minors/children in the 0-18 year age group can open an account. The account will be opened in the name of the minor, and a PRAN number will also be issued to him. 

NPS Vatsalya Scheme: What are required documents

The minor's birth certificate, while the guardian/parent's Aadhaar card, driving licence, passport, voter ID, NREGA job card, or National Population Register card for KYC. The guardian/parent's PAN card to track transactions.

NPS Vatsalya Scheme: What is the minimum investment?

The account can be opened with a minimum amount of Rs 1,000. This is also the amount one needs to deposit every financial year to keep their NPS Vatsalya account active.  

NPS Vatsalya Scheme: Places where account can be opened

The NPS Vatsalya account can be opened online and offline in a nationalised bank, PFRDA-accredited PoS, and post office. 

NPS Vatsalya Scheme: What are investment choices?

The NPS Vatsalya account will have auto choice and active choice like any other normal NPS account. By default, NPS Vatsalya account holders will get Moderate Lifecycle Fund, where their equity proportion will be 50 per cent. 

NPS Vatsalya Scheme: What are investment choices?

In Auto Choice, they will get a 75 per cent/50 per cent/25 per cent equity option, while in Active Choice, they can have up to 75 per cent equity option. In active choice, they can also pick corporate debt and government security options up to a 100 per cent limit.

NPS Vatsalya Scheme: Can one withdraw corpus?

On can withdraw only up to 20 per cent corpus at 18. They need to purchase annuity from the rest of the 80 per cent amount. If the total corpus is less than Rs 2.50 lakh, the entire corpus can be withdrawn. 

NPS Vatsalya Scheme: What will happen at 18 years of age?

The NPS Vatsalya account will be converted into a normal NPS account, and the account holder can continue their investment after that. The maximum age to contribute to NPS is 75 years.

NPS Vatsalaya Scheme: How you can generate Rs 32.60 crore extra fund with Rs 5,000/m NPS contribution?

According to Max Life Pension Fund Management, if one starts a Rs 5,000 monthly contribution in NPS Vatsalya at age 5 and contributes till 60 (for 55 years total), at a 13 per cent annualised return, they can generate an estimated corpus of Rs 40.9 crore. The invested amount in 55 years will be Rs 33 lakh.

NPS Vatsalaya Scheme: How you can generate Rs 32.60 crore extra fund with Rs 5,000/m NPS contribution?

In the second scenario, another person who invests Rs 5,000 monthly from the age of 18 to 60, their expected corpus at 13 per cent annualised return will be Rs 8.3 crore. The invested amount in that period will be Rs 25.20.
Thus, we see that by staying in investment for 13 years more, one can generate a corpus of Rs 32.60 crore extra with investing just Rs 7.80 lakh more.

NPS Vatsalya vs NPS Calculation Chart

Scenario 1
Investment Horizon: 5 Years to 60 Years
Investment	Rs. 5,000
Tenure	55 Years
Total Invested	Rs. 33 Lakhs
Expected Rate of Return	13%
Fund Value	Rs. 40.9 Cr.

Chart Courtesy: Max Life Pension Fund Management

 

NPS Vatsalya vs NPS Calculation Chart

Investment Horizon: 18 Years to 60 Years
Investment	Rs. 5,000
Tenure	42 Years
Total Invested	Rs. 25.2 Lakhs
Expected Rate of Return	13%
Fund Value	Rs. 8.3 Cr.

Chart Courtesy: Max Life Pension Fund Management