Today, almost every parent is saving something for their child’s education.
Because education is not an expense—it is an investment in the future.

But this is where a major mistake happens—
“Savings plans” and “Education plans” are often considered the same.

Recently, NPS Vatsalya has been widely discussed.
From the name itself, it feels like a scheme designed specifically for children’s education.

Low cost, disciplined investing, long-term returns—
all of this sounds attractive.

But when you look at it from a practical perspective,
the picture looks a bit different.

How does the cost of education increase?

Today, the annual fee of a good college is easily ₹5–7 lakh.
Education inflation grows at around 10% per year.

This simply means:

A cost of ₹10 lakh today

Can become ₹20–25 lakh in 8–10 years

The main limitation of NPS Vatsalya

NPS Vatsalya is fundamentally a pension system.
Even if the account is in the child’s name, its nature does not change.

When the child turns 18:

The full amount cannot be withdrawn

Only about 80% can be taken as a lump sum

The remaining 20% must be invested in a pension (annuity)

For example:

If parents build a fund of ₹25 lakh over 18 years:

Amount received ≈ ₹20 lakh

Remaining ₹5 lakh gets locked in pension

But if the education cost is ₹25–28 lakh,
where will this gap be filled from?

This is where we realize—
the plan is not bad, but it does not align with the goal.

Another practical concern

Flexibility is very important in education planning:

The child may choose to study abroad

May change courses

May even choose a different career path

Costs may suddenly increase

But in NPS Vatsalya:

Withdrawals have restrictions

Reasons are predefined

Rules may change in the future

Because of this, there is no certainty of getting full funds on time for education.

Then what is this plan suitable for?

NPS Vatsalya is useful for:

Long-term savings

Building financial discipline

But it cannot be the primary foundation for an education fund.

What should an ideal education plan do?

An education plan should:

Beat 10% inflation

Provide the full amount at the right time

If these two conditions are not met,
then the plan is not suitable for education.

Today, parents often ask:
“What return will I get?”

But in education planning, the real question is:

“Will I have the full money in hand when I actually need it?”

If the answer is “No”,
then it’s time to rethink your plan—before it’s too late.

Why does a family need a financial expert?

Today, the problem is not the lack of options—
but choosing the wrong plan for the right goal.

Understanding:

The required education corpus

Time horizon

Inflation

Terms and conditions of different plans

…is not easy for a common parent.

This is where a family financial expert plays a crucial role.

Instead of just saying what is good,
they first clarify what is NOT suitable for a specific goal.

They help families plan education, retirement, and long-term savings separately,
without mixing them up.

Harshal Kothari
International Certified Finance Coach
+91 9006004700