NPS Vatsalya Yojna : Recently, Union Finance Minister Nirmala Sitharaman has launched the National Pension System Vatsalya (NPS Vatsalya) scheme. Vatsalya Yojana is a new pension scheme created for children.
This scheme was announced in the Union Budget on 23 July 2024. Its main objective is to provide savings facility for children and prepare them financially for the future. An online platform has also been launched with this scheme, which will make it easier to subscribe to this scheme. This is an extension of the existing National Pension System (NPS), which is now made available to minors as well.
Important points of Vatsalya Yojana:
Who will be included
All minor citizens below the age of 18 years can join the NPS Vatsalya scheme. The account will be opened in the name of the minor and can be operated by the parents or guardians.
Account opening conditions
The minimum annual contribution to open the account will be Rs 1,000. However, there is no limit on the maximum contribution.
Where can accounts be opened
This scheme can be opened through major banks, India Post, Pension Funds and e-NPS platform operated by PFRDA.
Investment Options
Subscribers will get a range of options for investment, including government securities, corporate debt and equity. These options can be chosen based on risk and return preferences.
What happens when you turn 18?
When the minor turns 18, the account will automatically be converted into an NPS-Tier I account. The KYC process has to be completed within three months of turning 18.
Benefits and withdrawal rules
All the benefits and withdrawal criteria on maturity in the scheme will be applicable for NPS-Tier I. The main objective of NPS Vatsalya Yojana is to help minors make disciplined savings and take advantage of compounding over time, thereby helping them experience financial responsibility. This scheme is an important step in securing the future of children.
