Pension Scheme: Under the NPS Vatsalya Scheme, parents will be able to save for the future of their children by investing in a pension account so that a large corpus can be created for them in the long term.
NPS Vatsalya Scheme: Today is Children’s Day. Today is the opportunity for parents to plan to improve the future of their children through financial planning so that the expenses on their higher education can be easily met in the coming days. The inflation of education in the country is not hidden from anyone. The expenditure on education is continuously increasing, which is increasing at a faster pace than the inflation rate. In such a situation, to educate your children in a reputed institute, it is necessary to start planning it from now.
Children’s retirement planning has become possible
With financial planning, people now have the option that they can also do retirement planning of their children, which was not available to the parents earlier. Now pension accounts of children can also be opened so that a large corpus can be created in the long term and their future can be made financially secure. In September 2024, Finance Minister Nirmala Sitharaman launched the NPS Vatsalya Scheme keeping this mission in mind. The aim of the scheme is to connect people of such age with pension who were deprived of it till now. Under this scheme, pension accounts of minors can also be opened. The aim of NPS Vatsalya is also to increase the tendency of investing and saving among parents.
What is NPS Vatsalya Scheme
Under the NPS Vatsalya Scheme, parents will be able to save for their children’s future by investing in a pension account so that a large corpus can be created for them in the long term. NPS Vatsalya provides flexible contributions and investment options. Parents can invest at least Rs 1,000 annually in the name of the child. There is no limit on the maximum amount to be deposited. This will inculcate a habit of disciplined saving for children in parents.
The NPS Vatsalya Scheme has been designed in such a way that the parents will operate the pension account until the child turns 18. After the child turns 18, the account will be transferred to the child’s name. When the child becomes an adult, the account can be easily converted into a regular NPS account. An account of any minor citizen up to the age of 18 years can be opened in the NPS Vatsalya Scheme. The account will be opened in the name of the minor and the guardian will manage the account until the child attains majority. The minor will be the beneficiary of this pension account. After the minor attains majority, NPS Vatsalya will be converted into a regular NPS account and can be ported to the NPS account of the workplace upon getting employment.
How and where will NPS Vatsalya account be opened
- NPS Vatsalya account can be opened with a minimum contribution of Rs 1000.
- Birth certificate, school living certificate, matriculation certificate, PAN and passport can be given to open NPS Vatsalya account as proof of child’s date of birth. Parents can provide Aadhaar, driving license, passport, voter ID, MNREGA job card as proof of their identity card and address. Parents will also have to provide their PAN number.
- NPS Vatsalya account can be opened in bank branches or online. There is also a facility to open NPS Vatsalya account in post office and PFRDA office.
- When the child turns 18, NPS Vatsalya account will be seamlessly converted to NPS Tier-1 model. For this process, fresh KYC is required within three months of completion of 18 years.
