The NPS Vatsalya was formally launched last week. Parents can open an NPS account in the name of minor children to save for their retirement. Here is a look at what experts have to about whether there any better alternatives to save for a child.(Text by ET Bureau)
ET Online
2/5
Preeti Chandrashekhar, India Business Leader, Health and Wealth, Mercer
NO. Investing in mutual funds requires some understanding of how the markets work. In NPS Vatsalya, there are auto mode options, which decide the asset mix depending on your age. For the uninitiated, this is where they can start their investment journey.
ET Online
3/5
Rajesh Khandagale, Head, NPS, KFin Technologies
NO. Competing products may offer better returns, but the NPS has been consistent over a long period. The pension scheme also offers an inherent discipline. Once you invest, you can’t take the money out till you retire. You remain invested for the long term.
ET Online
4/5
Vidya Bala, Co-founder, PrimeInvestor.in
YES. Products like Sukanya Samriddhi (for girls), or PPF fulfill the goals to some extent, but with a low risk-return profile. Locking money in annuities or converting into NPS skips the many steps involved in a child’s growth and development in life.
ET Online
5/5
Raj Khosla, Managing Director, MyMoneyMantra.com
MAYBE. Not all investors in mutual funds have earned high returns because investors tend to exit early. NPS Vatsalya is a very long-term product and if the investment is allowed to compound over 40-50 years, even a small amount can grow into an enormous sum at 60.
