The NPS Vatsalya Yojana is a new plan by the government to help secure the financial future of children under 18 in India. It was started by Finance Minister Nirmala Sitharaman in the 2024-25 Budget. This scheme lets parents or guardians open a savings account for their minor children under the National Pension System (NPS). The goal of this plan is to help families save money over the long term, so that children have financial security when they grow up.
In this article, I will discuss the details of NPS Vatsalya Yojana Apply online, how it works, eligibility, and its benefits for families.
- What is NPS Vatsalya Yojana?
- How Does NPS Vatsalya Yojana Work?
- Benefits of NPS Vatsalya Yojana
- How to Apply for NPS Vatsalya Yojana?
- Who is Eligible for NPS Vatsalya Yojana?
- Documents Required
- FAQs
- Conclusion
What is NPS Vatsalya Yojana?
The NPS Vatsalya Yojana is part of the National Pension System (NPS). It allows parents or guardians to open a pension account for their children who are under 18. Parents can add money to this account to save for the child’s future retirement. When the child turns 18, they can either take control of the account themselves or change it into a regular NPS account.
The main goal of the scheme is to encourage early financial planning for children’s future, especially to build a retirement corpus.
| Feature | Details |
|---|---|
| Launch Date | 18 September 2024 |
| Introduced By | Finance Minister Nirmala Sitharaman |
| Target Audience | Minor children (below 18 years) |
| Minimum Deposit Amount | ₹1,000 annually |
| Average Annual Return | 14% |
| Account Conversion | Converted into a regular NPS account after the child turns 18 |
| Management Authority | Pension Fund Regulatory and Development Authority (PFRDA) |
| Official Website | Click Here |
How Does NPS Vatsalya Yojana Work?
Parents or guardians can open an NPS Vatsalya account for their child. They need to add at least ₹1,000 every year to the account. Over time, this money will grow because it is invested for the long term. Professional fund managers, who work under the Pension Fund Regulatory and Development Authority (PFRDA), manage these investments to help the money grow.
When the child turns 18, they can start managing the account themselves. They can also choose to change it into a regular NPS account, which will keep giving them the same benefits as before.
👉 Union Finance Minister Smt. @nsitharaman to launch #NPSVatsalya Scheme on September 18, 2024
— Ministry of Finance (@FinMinIndia) September 16, 2024
👉 Participants from nearly 75 locations to virtually join the main launch in New Delhi
👉 Children subscribers to be initiated into #NPSVatsalya with PRAN cards
👉 #NPSVatsalya… pic.twitter.com/RnrElL5N5M
Benefits of NPS Vatsalya Yojana
The NPS Vatsalya Yojana offers multiple benefits to parents and children alike. Some of the most important advantages include:
1. Long-Term Financial Security
This scheme helps build a retirement fund for children from an early age. As the money is invested over the years, it grows. By the time the child becomes an adult, they will have a good amount of savings for their future.
2. Affordable Investment
The scheme is budget-friendly, requiring only a minimum deposit of ₹1,000 per year. This low amount makes it easy for many families to participate, no matter their income level.
3. High Returns
With an average yearly return of 14%, the NPS Vatsalya Yojana provides better returns than many other investment options. Since the money grows over time through compounding, it’s a great way to build wealth for children in the long run.
4. Tax Benefits
In the current NPS system, people who contribute to the scheme can get tax deductions under Section 80C of the Income Tax Act. This means parents or guardians can save on taxes based on the money they put into the account.
5. Partial Withdrawal
After three years, parents can take out up to 25% of the money they invested for specific needs like paying for education or handling medical emergencies. They can do this up to three times until the child turns 18 years old.
How to Apply for NPS Vatsalya Yojana?
Applying for NPS Vatsalya Yojana is simple. Parents or guardians can sign up online using the official NPS websites, like eNPS. Here’s a simple guide to help with the process:
- Go to enps.nsdl.com or nps.kfintech.com.
- Click on “Register” and fill out the form using your PAN card, Aadhaar card, or mobile number.
- Complete KYC: Your bank will verify your identity.
- After registering, you’ll get a Permanent Retirement Account Number (PRAN) for the child.
- Add at least ₹1,000 to start the account.
Who is Eligible for NPS Vatsalya Yojana?
The eligibility criteria for the NPS Vatsalya Yojana are simple:
- Age Limit: You can only open the account for children under 18.
- Only parents or legal guardians can set up and manage the account.
- The scheme is for Indian citizens who want to save money for their child’s future.
Documents Required
To open an NPS Vatsalya account, the following documents are required:
- Identity Proof for Guardian: Aadhaar card, PAN card, passport, or driving license.
- Address Proof for Guardian: An official document showing where you live.
- Identity Proof for Child: Aadhaar card, birth certificate, or school ID.
- Proof of Age for Child: Any document showing the child’s age.
- Mobile Number and Email ID: For contact details.
- Photograph: A photo of both the guardian and the child.
FAQs
The minimum contribution is ₹1,000 per year.
When the child turns 18, the NPS Vatsalya account can either be managed by the child or converted into a regular NPS account.
Only parents or legal guardians can open the account on behalf of their minor children.
Yes, contributions to the NPS Vatsalya account are eligible for tax benefits under Section 80C of the Income Tax Act.
No, withdrawals are not allowed until the child turns 18. The focus of the scheme is long-term savings.
Conclusion
The NPS Vatsalya Yojana is a great option for parents who want to make sure their children are financially secure in the future. It lets you invest money for a long time, requires only small contributions, and offers good returns. It’s a smart way to save for your child’s future, so it’s worth thinking about if you want to plan ahead.