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NPS Vatsalya Scheme: Today is Children’s Day. Today is an 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 cost of education in the country is not hidden from anyone. Expenditure on education is continuously increasing, which is increasing at a faster rate than the inflation rate. In such a situation, it is important to start planning from now to educate your children in a reputed institute.
Retirement planning for children became possible
With financial planning, people now have the option to do retirement planning for their children, which earlier parents did not have the opportunity to do. Now children’s pension account can also be opened so that their future can be made financially secure by creating a large corpus in the long term. Keeping this mission in mind, in September 2024, Finance Minister Nirnala Sitharaman launched the NPS Vatsalya Scheme. The objective 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 objective of NPS Vatsalya is also to increase the tendency of parents to invest and save.
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 run. NPS Vatsalya offers Flexible Contributions and Investment Options. Parents can invest a minimum of Rs 1,000 annually in the name of the child. There is no limit on the maximum amount to be deposited. This will inculcate the habit of disciplined saving among the parents for their children.
The NPS Vatsalya Scheme has been designed in such a way that the parents will operate the pension account till the child turns 18 years of age. The account will be transferred to the child’s name after he turns 18. When the child attains adulthood, the account can be easily converted into a regular NPS account. In NPS Vatsalya Scheme, account can be opened for any minor citizen up to 18 years of age. The account will be opened in the name of the minor and the parents will manage the account till the child attains adulthood. The minor will be the beneficiary of this pension account. After the minor attains majority, NPS Vatsalya will be converted into regular NPS account and on getting employment, it can be ported to the workplace NPS account.
How and where to open NPS Vatsalya account
– NPS Vatsalya account can be opened with a minimum contribution of Rs 1000.
To open an NPS Vatsalya account, birth certificate, school living certificate, matriculation certificate, PAN and passport can be given as proof of the date of birth of the child. You can give your identity card and address proof to the guardian like Aadhar, Driving License, Passport, Voter ID, MNREGA Job Card. 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, the NPS Vatsalya account will be seamlessly converted into NPS Tier-1 model. For this process, it is necessary to do KYC afresh within three months of completing 18 years.
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