Indian Government has started the NPS Vatsalya Scheme 2024 to help kids save money for their future. The NPS Vatsalya Scheme is perfect for parents and guardians who want to invest for their children’s long-term savings. Through this scheme, parents can open special accounts for their minor children and put money in for their retirement. This is a smart way to encourage early savings for children.
The main goal of the NPS Vatsalya Scheme is to support long-term savings for minors. It’s available for everyone in India, even NRIs (Non-Resident Indians), as long as parents or guardians are handling things for the kids. When you open an account, it must be in the name of the child.
Once you register, your child will get a Permanent Retirement Account Number (PRAN) card. This card is very important for future savings. With the NPS Vatsalya Scheme, you are giving your children a great start for their financial journey.
What is the NPS Vatsalya Scheme?
The Finance Minister of India, Nirmala Sitharaman, has announced the new NPS Vatsalya Scheme. This scheme is a helpful option for young people and is different from the current National Pension System (NPS).
The NPS is overseen by the Pension Fund Regulatory and Development Authority (PFRDA). It’s great because it offers flexibility and tax benefits.
Parents or guardians can easily open an NPS account for their kids who are minors. When the child turns 18, the account can be changed to a normal NPS account without any hassle. This way, it helps in making sure that they have money saved for the future.
This transition ensures that minors have a structured retirement plan in place from an early age. The scheme also allows the option to convert the plan into a non-NPS product once the child reaches adulthood.
Also Read: Education Loan e Voucher Scheme
Short Summary of NPS Vatsalya Scheme
| Name of the Scheme | NPS Vatsalya Scheme 2024 |
| Launched By | Government of India |
| Introduced By | The Finance Minister of India Nirmala Sitharaman |
| Regulating Authority | Pension Fund Regulatory and Development Authority (PFRDA) |
| Objective | To create a more financially secure future for the younger generation by allowing parents to start retirement planning for their children at an early stage |
| Benefits | This scheme allow parents and guardians to invest on behalf of their children |
| Beneficiary | Minors under 18 years of age with a PAN Card |
| Contributors | Parents or legal guardians |
| Minimum Contribution | Rs. 1,000 per year |
| Maximum Contribution | No upper limit |
| Investment Options | 1. Default: LC-50 (50% equity); 2. Auto: LC-75, LC-50, LC-25; 3. Active: Custom equity, debt, government bonds |
| Withdrawal | Up to 25% allowed after 3-year lock-in for education, illness, or disability (up to 3 times) |
| Exit Options | More than Rs. 2.5 lakh: 80% for annuity, 20% lump sum withdrawal; Less than or equal to Rs. 2.5 lakh: full withdrawal |
| State | All states of India |
| Year | 2024 |
| Locations | Nearly 75 locations throughout the country |
| Official Website | enps nsdl Portal |
NPS Vatsalya Scheme Purpose
The purpose of the scheme are as follows:
- The purpose of launching the scheme is to facilitate long-term savings for minors.
- Aim of the scheme is to create a more financially secure future for the younger generation by allowing parents to start retirement planning for their children at an early stage.
- Aims to build a strong financial foundation for minors, supporting their retirement planning from a young age.
- The scheme is designed as an alternative of the existing National Pension System (NPS), which is customized to support younger individuals.
- The scheme aims to allow parents or legal guardians to contribute toward their child’s future, ensuring their financial well-being.
Eligibility Criteria
To avail of the benefits under the scheme, applicants should fulfill these eligibility criteria:
- The legal guardian must provide Know Your Customer (KYC) documents, including proof of identity, proof of address, and date of birth for the minor.
- Applicant must be a permanent resident of India.
- Non-Resident Indians (NRIs) can also open an account for their minor children.
- The scheme is available for minors under the age of 18 years.
- The minor must have a valid PAN (Permanent Account Number) card.
- The account must be opened by a parent or legal guardian in the name of the minor.
- Parents or legal guardians are responsible for making contributions to the account until the minor reaches 18 years of age.
Required Documents
To avail the benefit under the scheme, candidates should have these following documents:
- Aadhar Card
- Date of Birth Proof of Minor
- Guardian Signature
- Scanned Copy of Passport (Applicable only for NRI Subscribers)
- Scanned copy of Foreign Address Proof (Applicable only for OCI Subscribers)
- Scanned copy of Bank Proof (Applicable only for NRI/OCI Subscribers)
Salient Features
The salient features of the NPS Vatsalya Scheme are as follows:
- Aimed at minors under 18, with parents or legal guardians contributing on their behalf.
- Requires a minimum annual contribution of Rs. 1,000, with no upper limit.
- The account seamlessly transitions to a regular NPS Tier-1 account when the minor turns 18, after completing KYC.
- A Permanent Retirement Account Number (PRAN) is issued to the minor when the account is opened.
- Offers Default, Auto, and Active investment choices, allowing guardians to allocate funds across equity, debt, and government securities.
- LC-50 (50% equity)
- Aggressive LC-75, Moderate LC-50, or Conservative LC-25
- Custom allocation in equity (up to 75%), debt, government bonds, and alternative assets.
- Allows up to 25% withdrawal after a 3-year lock-in for education, illness, or disability (up to 3 withdrawals).
- After 18, if the corpus exceeds Rs. 2.5 lakh, 80% must be invested in an annuity, and 20% can be withdrawn. For a corpus below Rs. 2.5 lakh, the entire amount can be withdrawn.
- Both resident and NRI parents/guardians can open the account for their minor children.
- Accounts can be opened via Points of Presence (POPs) such as banks, India Post, and the online e-NPS platform.
Contribution Amount and Contributor
- Under the Scheme, parents or legal guardians can contribute on behalf of their minor children. The minimum annual contribution is Rs. 1,000, with no upper limit on contributions. This allows flexibility for parents or guardians to invest according to their financial capacity, ensuring long-term financial security for the child.
Maturity Period
- The NPS Vatsalya Scheme matures when the minor turns 18. At this point, the account transitions into a regular NPS Tier-1 account, continuing as a long-term retirement savings plan beyond the initial maturity period.
Types of Investment
The Scheme offers the following types of investment options:
- Default Choice: Lifecycle Fund LC-50**, with 50% in equity and 50% in debt.
- Auto Choice:
- Aggressive LC-75: 75% equity, 25% debt.
- Moderate LC-50: 50% equity, 50% debt.
- Conservative LC-25: 25% equity, 75% debt.
- Active Choice: Custom allocation across:
- Equity (up to 75%)
- Corporate Debt (up to 100%)
- Government Securities (up to 100%)
- Alternative Assets (up to 5%)
Mode of Withdrawal
Under the scheme, the modes of withdrawal are:
- Partial Withdrawal: Up to 25% of the contributions can be withdrawn after a 3-year lock-in period for specific purposes like education, illness, or disability, with a maximum of three withdrawals allowed.
- Full Withdrawal:
- Upon turning 18, if the corpus exceeds Rs. 2.5 lakh: 80% of the corpus is used to purchase an annuity, and 20% can be withdrawn as a lump sum.
- If the corpus is Rs. 2.5 lakh or less: The entire amount can be withdrawn as a lump sum.
- In Case of Death: The entire corpus is returned to the designated guardian.
How to Apply Online NPS Vatsalya Scheme 2024
To apply online for the scheme, follow the steps provided below:
Step 1: Visit the official enps website.
Step 2: On the homepage click on the “REGISTER NOW” button under the “NPS Vatsalya (Minors)” section.
Step 3: Enter your date of birth, Permanent Account Number (PAN), Mobile Number, Email ID and click on “BEGIN REGISTRATION” button.
Step 4: The application form will appear on your screen.
Step 5: Fill out the application form with the required details asked in the form such as name, address, and age and attach the relevant documents.
Step 6: Click on the “SUBMIT” button to complete the application process.
Login for NPS Vatsalya Scheme
To log in, please follow the below-mentioned steps:
Step 1: Visit the official website.
Step 2: On the homepage click on the “National Pension System (NPS)” option under sub heading “Subscriber” in the “Login” section.
Step 3: On another page under “Subscribers” section, enter User ID, Password, and Captcha and click on the box after reading carefully.
Step 4: Click on “Submit” button to complete the login process.
Contact Details
- Address: Protean e-Gov Technologies Limited. 1st Floor, Times Tower, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013
- Telephone Number: (022) 2499 3499
- Toll-Free Number For Registered Subscriber: 1800 2100 080
FAQs
What is the key objective of NPS Vatsalya Scheme?
The objective of launching the scheme is to facilitate long-term savings for minors.
What is the benefit of the scheme?
Under the scheme, the parents and guardians can open an account for their minor children and make contributions for their retirement savings.
Who launched the scheme?
The Finance Minister of India Nirmala Sitharaman has launch NPS Vatsalya Scheme.
Who can open an NPS Vatsalya account?
Parents or legal guardians of minors under 18 years of age can open an account. Both Indian citizens and NRIs can open accounts for their minor children.
What are the eligibility criteria for the scheme?
The minor must be under 18 years of age and have a PAN card. The account must be opened by a parent or legal guardian, who must provide KYC documents.
What is the minimum and maximum contribution amount?
The minimum annual contribution is Rs. 1,000, with no upper limit on the amount that can be contributed.