NPS Vatsalya Scheme has been launched by the central government that 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. While the NPS Vatsalya account will be opened in the name of minor and operated by Guardian, the minor will be the sole beneficiary.

Guardian can choose any one of the Pension Funds registered with PFRDA. NPS Vatsalya Plan can be seamlessly converted into a normal NPS account on minor becoming an adult.

NPS Vatsalya Scheme: How To Open 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 via Online platform (e-NPS).

NPS Vatsalya Scheme: Documents Required

KYC of Guardian 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 if the guardian is NRI.

NPS Vatsalya Scheme: Minimum Contribution, Maximum Contribution

Opening contribution: Minimum Rs. 1,000 and no upper limit.

Subsequent contribution: Minimum Rs. 1,000 per annum and no upper limit.

NPS Vatsalya Scheme: Investment Choices:

Default Choice: Moderate Life Cycle Fund – LC-50 (50% equity).

Auto Choice: Guardian can choose Lifecycle Fund – Aggressive – LC-75 (75% equity), Moderate LC-50 (50% equity), or Conservative LC-25 (25% equity).

Active Choice: Guardian actively decides allocation of funds across Equity (up to 75%), Corporate Debt (up to 100%), Government Securities (up to 100%), and Alternate Asset (up to 5%).

NPS Vatsalya Scheme: Withdrawal, Exit and Death Benefits

Withdrawal up to 25% of contribution after a lock-in period of 3 years allowed for education, specified illness, and disability. Maximum 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:

– Corpus more than Rs. 2.5 lakh: 80% of the corpus is utilized for the purchase of annuity and 20% can be withdrawn as a lump sum.

– Corpus less than or equal to Rs. 2.5 lakh: Entire corpus can be withdrawn as a lump sum.

On death, the entire corpus would be returned to the guardian.