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The Finance Minister Nirmala Sitharaman has today launched a new NPS scheme for minors called NPS Vatsalya.
Through this scheme, parents and guardians can open an NPS account on behalf of their children. The account is considered active if a subscriber invests a minimum of Rs.1000 per annum.
Here are some key features of NPS Vatsalya:
Who can open the account: Parents or guardians can open an NPS Vatsalya account on behalf of their children (minors) and contribute to it regularly till the child turns 18.
What happens after the minor turns major: When the child turns 18, the NPS Vatsalya account will become a regular NPS Tier – I (All Citizen) account. From this point, children will have to make the contribution to their NPS account.
Also, after turning major, the person will have to submit the documents for new KYC to continue the NPS Vatsalya.
Minimum investment amount: Parents and guardians can contribute a minimum of Rs.1,000 per year, making it affordable and accessible to families from all income levels. There is no maximum limit to invest in this scheme.
Where to open this account: Subscribers can reach out to POPs, pension agents and retirement advisors to start NPS Vatsalya.
Documents needed: Birth certificate and KYC of guardian
Investment choice: All three choices will be available: moderate life cycle (50% equity), auto choice (equity allocation chances with risk appetite) and active choice (up to 75% equity)
Kurian Jose, CEO, Tata Pension Management said that NPS Vatsalya is a new initiative dedicated to securing the financial future of children. He said, “By encouraging early investment and providing a structured savings plan, NPS Vatsalya aims to build a robust financial foundation for young individuals. This innovative approach not only ensures that children receive the benefits of disciplined saving and compounding over time but also fosters a sense of financial responsibility from an early age.”
