Govt Launches NPS Vatsalya Scheme: See How It Secures Your Child's Financial Future

The much-anticipated online application portal for the NPS Vatsalya scheme, which is only available to young people, was unveiled by Union Finance Minister Nirmala Sitharaman. 

Parents or guardians can begin saving for their minor children under the NPS Vatsalya plan, with the option to convert the account at a later date to an NPS Tier 1. 

What is NPS Vatsalya Plan?

NPS Vatsalya is a new program that uses the advantages of long-term wealth accumulation and compounding to assist parents in setting aside money for their children's futures through pension accounts. The programme is accessible to families from a range of economic situations since it offers flexible contribution and investment options, enabling parents to begin investing as little as Rs. 1,000 annually in their child's name. 

It's crucial to remember that the account will change into a conventional NPS account once the child reaches maturity. Sitharaman excluded any more tax advantages for the plan for the time being. 

NPS Vatsalya Plan: Who are Eligible?

All Indian nationals, including those who are non-resident Indians (NRIs), are eligible to open accounts under the NPS Vatsalya scheme for their young children. Minors' legal guardians are also eligible to create an NPS Vatsalya account for the children. 

Parents and legal guardians must ensure that the account is registered under minor's name. Upon registration, minor subscribers will receive Permanent Retirement Account Number (PRAN) cards.

Note: The account will be automatically transferred, once the child turns 18.

Benefits of NPS Vatsalya Plan

The scheme offers an average annual return of 14%. If you invest ₹15,000 per month for 15 years for a 3-year-old child, and earn a 14% annual return, the total amount will grow to approximately ₹91.93 lakh after 15 years.

How to Register for NPS Vatsalya Plan?

Parents or legal guardians can open the NPS Vatsalya account for the minor by following the given simple steps:

Step 1: Visit the official websites of NPS, either enps.nsdl.com or nps.kfintech.com.

Step 2: Click on the "Registration" option to start the process.

Step 3: Fill in the required details including PAN number, Aadhaar card, or mobile number.

Step 4: The Bank will handle the KYC (Know Your Customer) process.

Step 5: After successful registration, you’ll receive your Permanent Retirement Account Number (PRAN).

Step 6: You can open the NPS Vatsalya account with a minimum deposit of ₹1,000.

This is a long-term investment strategy that will be supervised by the Pension Fund Regulatory and Development Authority (PFRDA).