NPS Vatsalya calculator: How a ₹2,000 monthly investment can create crorepati wealth for your child

NPS Vatsalya calculator: The NPS Vatsalya Scheme is a pension plan that allows parents to contribute to a retirement fund for their minor children, which converts into a regular NPS account upon reaching adulthood. Union Finance Minister Nirmala Sitharaman launched the NPS Vatsalya Yojana in the July Budget 2024. It is managed under the Pension Fund Regulatory and Development Authority (PFRDA).

Is the NPS Vatsalya Scheme a good investment?

If you're aiming to build a structured retirement fund for your child and are prepared for long-term investment, the NPS Vatsalya scheme can be a viable choice.

All minors (individuals up to 18 years of age) are eligible to participate in the NPS Vatsalya scheme.

To open a Vatsalya account, you must make a minimum initial contribution of ₹1,000.

If you start investing ₹2,000 per month for a child born on 10 November 2024, with an annual contribution increase of 10% and an assumed return on investment of 10% per annum, the total investment over 18 years would amount to approximately ₹10,94,380.

This makes the scheme a powerful long-term tool for building a retirement fund, especially when started early in life.

1)Enter your child’s date of birth

• Select your child’s date of birth using the format dd/mm/yyyy.

• This allows the calculator to determine the child’s current age and the total investment period.

2)Choose contribution frequency

• Decide whether you want to contribute monthly or annually:

• For annual contributions, enter the amount you plan to invest each year.

• For monthly contributions, input the amount you will deposit every month.

3)Set annual contribution increase

• Enter the percentage by which you plan to increase your contribution each year.

• For example, if you expect to raise your investment by 5% annually, enter “5”. If your contribution will remain fixed, enter “0”.

4)Select expected rate of return (RoR)

• Choose your expected annual return from the dropdown menu (e.g., 8%, 10%, or 12%).

• If you have a specific rate in mind, select "Custom" and enter your desired RoR.

5)Click ‘calculate pension’

• Once all details are filled in, click the “Calculate Pension” button. The calculator will display: your total investment, the estimated corpus at age 18, withdrawal options, and the projected corpus at age 60 if the investment continues.