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NPS Vatsalya: All you need to know about the pension scheme for children

Nishtha Badgamia
Authored By Nishtha Badgamia
Published: Sep 19, 2024, 02:24 IST | Updated: Sep 19, 2024, 02:24 IST
NPS Vatsalya: All you need to know about the pension scheme for children

NPS Vatsalya

India's Finance Minister Nirmala Sitharaman, on Wednesday (Sep 18)launched a new scheme under the National Pension System (NPS) aimedat financially securing the future ofchildren.The NPS Vatsalya scheme will be managed under the Pension Fund Regulatory and Development Authority (PFRDA).

What is NPS Vatsalya?

NPS Vatsalya enables parents to safeguard the future of their children through a pension account and leverage the benefits of compounding for long-term wealth. NPS Vatsalya allows parents to deposit a minimum of Rs 1000 ($11.95) per year in the child’s name until they area minor.

Sitharaman emphasised that the scheme highlightsthe government’s commitment to long-term financial planning and security for the country's citizens. The NPS Vatsalya will not only safeguard the children's future but is also designed on the principal intergenerational equity, providing coverage to both older and younger generations of the family. She also emphasised that NPS Vatsalya will encourage youngsters to develop a habit of saving and also mentioned that the scheme will provide a respectable future for individuals in their later years.

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How much can you save for your child through this scheme?

According to a post bythe Press Information Bureau (PIB) on the social media platform X, NPS Vatsalya can allow you to save this much for your child:

Annual Contribution: Rs 10,000 ($119.53)
Investment Duration: 18 years
Expected Corpus at 18: Rs 5 lakh @10% rate of return (RoR)
Expected Corpus at 60:
@10% RoR: Rs 2.75 crore
@11.59%* RoR: Rs 5.97 crore
@12.86%# RoR: Rs 11.05 crore

How to open an account for NPS Vatsalya?

Opening an NPS Vatsalya account is simple and can be done online or offline at dedicated Points of Presence (POPs) like banks and post offices. To open an account online, visit the eNPS website and follow the steps mentioned on it.

Key Features of NPS Vatsalya Scheme:

Eligibility Criteria: Any minor with an Aadhar card or Pan card is eligible.

Contributors: Parents or official guardians can contribute on behalf of their children with a minimum amount of Rs 1,000 per year, with no maximum contribution.

What are the documents required to open an NPS Vatsalya account?

As per the NPS Trust Website, the following are the documented required:

  • Date of birth proof of the minor (Birth Certificate, Matriculation Certificate, Passport or School Leaving Certificate).
  • KYC of the guardian shall be done by providing identity proof and address (Passport, Voter ID card, Driving Licence, Aadhar Card).
  • If the guardian is NRI, a solo or joint bank account of the minor is needed.

How to invest in NPS Vatsalya?

After the announcement of NPS Vatsalya, several banks released pension plans for minors. Banks such as the Reserve Bank of India, Punjab National Bank, Bank of Maharashtra, Canara Bank, Axis Bank, and ICICI Bank have released their pension plans under NPS Vatsalya. It is advised to check their official website or X handles for further information.

(With inputs from agencies)

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