NPS VATSALYA
This new initiative NPS Vatsalya is designed to start early in securing financial future of children, marking an important step in India’s pension system. The Scheme will be run under the Pension Fund Regulatory and Development Authority (PFRDA).
In pursuance of the announcement in the Union Budget 2024-25, Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman will launch the NPS Vatsalya scheme on September 18, 2024, in New Delhi. NPS Vatsalya will allow parents to save for their children’s future by investing in a pension account and ensure long-term wealth with the power of compounding. NPS Vatsalya offers flexible contributions and investment options, allowing parents to make investment of Rs. 1,000 annually in the name of the child, thus making it accessible to families from all economic backgrounds.
NPS
VATSALYA
Who is eligible to join the scheme ?
All minor citizens (age till 18 years). Account will be opened in the name of minor and operated by Guardian . Minor will be sole beneficiary
Where to open the account ?
NPS Vatsalya account can be opened through Points of Presence (POPs) which include major banks, India Post, Pension Funds etc. It can also be opened and operated Online platform (e-NPS)
Document required for opening the account :
KYC of Guardian shall be carried out by submitting Proof of Identity and Address (Aadhaar, Driving License, Passport, Voter ID card, NREGA Job Card, National Population Register)
Date of Birth proof of the Minor (Birth certificate, School leaving certificate, Matriculation Certificate, PAN, Passport)
NRE/NRO Bank Account (solo or joint) of the minor in case the guardian is NRI
Contribution :
Account Opening contribution: Min Rs. 1,000/- and Max no limit.
Subsequent contribution: Min. Rs. 1,000/- p.a. and Max no limit.
Pension Fund Selection : The guardian can choose any one of the Pension Fund registered with PFRDA.
1) Default Choice: Moderate Life Cycle Fund -LC-50 (50% equity)
(2) Auto Choice: Guardian can choose Lifecycle Fund - Aggressive -LC-75 (75% equity), Moderate LC-50 (50% equity) or Conservative-LC-25 (25% equity)
(3) Active Choice: Guardian actively decides allocation of funds across Equity (upto 75%), Corporate Debt (upto 100%), Government Securities (upto 100%) and Alternate Asset (upto 5%).
Withdrawal, exit and death:
• Withdrawal up to 25% of contribution after lock-in-period of 3 years allowed for education, specified illness and disability. Max three times.
• Upon attainment of age of 18 years, Seamless shift to NPS Tier - I (All Citizen)
• Exit allowed on attainment of 18 years of age
о Corpus more than Rs. 2.5 lacs: 80% corpus is utilized for purchase of annuity and 20% can be withdrawn as lump sump
O Corpus less than or equal to Rs. 2.5 lacs: entire corpus can be
withdrawn as a lumpsum.
• On death, entire corpus would be returned to the guardian.