PPF Vs NPS Scheme | PPF or NPS Vatsalya, which scheme is best for the bright future of your children?
PPF Vs NPS Scheme | The central government has launched a scheme called NPS Vatsalya for children. Under this scheme, children below 18 years of age can also open an account in the National Pension Scheme. By investing in this scheme, when the children grow up, there will be a large fund in their name. In such a situation, this scheme is related to investment for the better future of children. Under this, parents have to invest at least Rs 1000 in the name of the child in a year. There is no limit on the maximum amount deposited. The money deposited can be withdrawn after the child turns 18.
What is NPS Vatsalya?
This is a retirement plan. Till now, this scheme was for people above 18 years of age. But now it has been opened for children below 18 years of age as well. It is called NPS Vatsalya Yojana. In this you will get all the benefits that the elderly get. In this scheme, the parents of the children will invest in the name of the child. Under this scheme, the child's account has to be maintained for at least three years. After this and before the child turns 18, 25% of the amount can be withdrawn for education or treatment. After the age of 18, 20% of the deposited amount can be withdrawn. The remaining amount will have to be purchased as an annuity. That is, the child will get pension every month.
What is PPF scheme?
PPF means Public Provident Fund is also an investment scheme. More people prefer to invest in this scheme for children. However, even senior citizens can invest in it in their name. It pays fixed interest. This is a long-term investment scheme. In this you have to invest for at least 15 years. But then it can also be extended for 5-5 years. An account can be opened in any bank or post office under this scheme.
PPF Vs NPS Scheme
Currently, PPF offers an annual interest rate of 7.1%. Guaranteed fixed returns are available. The government estimates the interest amount every three months. The annual interest rate in NPS is around 10%. It offers equity linked returns. There is no fixed return. You can start investing in PPF from Rs 500. Investment in NPS Vatsalya starts from Rs 1,000 annually. PPF is an investment scheme, while NPS is a Vatsalya pension scheme. There is no pension after maturity in PPF. In NPS Vatsalya, you will be able to withdraw 20% on maturity. The remaining 80% of the amount will have to be purchased as annuity. This way you will get pension. PPF is a 15-year scheme. However, then it can be extended twice for 5-5 years. Nothing is fixed in NPS Vatsalya. This plan can continue even after the child turns 18, until he or she turns 60.
How much money will you get in NPS Vatsalya?
If your child is less than three years old and you invest Rs 1,000 every month till the child turns 18, it will become Rs 1.80 lakh in 15 years. If you assume 10% annual interest on it, then the interest amount will be around Rs 2.38 lakh. In such a situation, the total investment will be Rs 4.20 lakh in 15 years. Only 20% of this or Rs 84,000 will be available. The remaining amount will have to be given as annuity. It will get an annual interest rate of about 6%. Pension will start every month from this amount. With 7.1% interest on PPF, the total amount will be Rs 3.22 lakh in 15 years. In such a situation, a large amount will be available in PPF from the beginning. If you invest more money in both the schemes, the total investment will be more.
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