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NPS Vatsalya: NPS Vatsalya scheme of the Central Government has been started to secure the economic future of children. During the budget speech of 2024 on July 23 this year, Union Finance Minister Nirmala Sitharaman had announced NPS Vatsalya, a new pension scheme for children up to 18 years of age. At an event on Wednesday, September 18, the Finance Minister launched the portal for subscription to the NPS Vatsalya scheme. People from 75 different places across the country participated in this program organized in Delhi. During this period, Permanent Retirement Account Number i.e. PRAN was distributed to more than 250 children who opened accounts under NPS Vatsalya Scheme.
Who can open NPS Vatsalya account?
NPS Vatsalya is for the citizens of India. People belonging to every economic class can open it with the aim of giving a better and secure financial future to their children below 18 years of age. This account can be opened by parents or guardian on behalf of their children and can also be operated by the parents or guardian till the child turns 18 years of age i.e. majority.
What are the benefits of NPS Vatsalya Account?
Opening an NPS Vatsalya account gives the child an early opportunity to inculcate the habit of saving for retirement and develops financial savvy from an early age. This establishes the importance of financial planning and discipline, which can be beneficial throughout the child's life.
How does NPS Vatsalya Account operate?
This account is opened in the name of the child by his natural or legal guardian.
The child in whose name the NPS Vatsalya account is opened is its sole beneficiary.
A Permanent Retirement Account Number i.e. PRAN is issued in the name of the child.
NPS Vatsalya Account is operated by the guardian exclusively for the benefit of the minor until the child attains majority i.e. attains the age of 18 years.
What is the process to open NPS Vatsalya account?
NPS Vatsalya account can be opened through the following means
It can be opened online or offline through all major banks including State Bank of India, HDFC Bank, ICICI Bank, PNB, Axis Bank, Post Office or PFRDA registered Point of Presence (POP). You can apply directly to these financial institutions to open an account. Or you can take the help of your trusted financial advisor or pension agent for this.
You can also apply for NPS Vatsalya account by visiting the online portal of NPS Trust (eNPS). One thing to note is that the parent or guardian opening the account on behalf of the child will have to provide details of his/her date of birth, PAN card, mobile number and email ID during the initial registration. The parent or guardian must provide the necessary information to download his/her KYC records from the Central KYC Registry (CKYCR) for the purpose of verification of his/her identity and address from the database of the CKYCR Registry. Details like name, address, date of birth, PAN number are required in the records for KYC.
For online registration, you can register with any of the following Central Recordkeeping Agencies (CRAs).
impersonator
kfintech
cams nps
What is required for KYC of NPS Vatsalya Account?
The KYC norms applicable to the parents should be as per the standards prescribed by PFRDA.
In case of a Court appointed legal guardian, a copy of the Court order regarding appointment of the legal guardian should be submitted along with the KYC documents.
For how much money can NPS-Vatsalya account be opened?
NPS-Vatsalya Yojana is an investment option in which parents or guardians can deposit money on behalf of their children to secure their financial future. Under this scheme, parents or guardians will be able to open an NPS-Vatsalya account in the name of their child with a minimum of Rs 1000. After that, till the age of 18 years, parents or guardian will be able to deposit a minimum of Rs 1000 and a maximum of any amount in the child's NPS-Vatsalya account every year. According to SBI Pension Fund platform, there is no limit on the maximum amount that can be deposited in this account. This means that parents can deposit any amount in their child's NPS-Vatsalya account.
How much fund will be created?
An example is given on the SBI Pension Fund platform to explain the NPS-Vatsalya scheme. For example, the information and calculations shown in the list below are based on data and estimates to date, which may differ from the actual returns achieved.
| Investment amount and period | corpus over 18 yearsRate of Return (10%) | Fund in 60 yearsRate of Return (10%) | Fund in 60 yearsRate of Return (11.59%) | Fund in 60 yearsRate of Return (12.86%) |
| Annual contribution: Rs 10,000 | 5 lakhs | 2.75 crores | 5.97 crores | 11.05 crores |
As per the above list, if a parent is contributing Rs 10,000 every year to the NPS-Vatsalya account opened in the name of his child, then when the child becomes an adult, this amount will be reduced to Rs 5 at the rate of return of 10 per cent. It will become lakh rupees. On reaching the age of 60 years, this amount will become Rs 11.05 crore at the rate of return of 12.86 percent.
Annual Contribution: Rs 10,000
Investment Period: 18 years
Estimated amount of money at age 18: Rs 5 lakh at 10% return rate
Estimated wealth at age 60: Rs 2.75 crore at 10% return rate
Rs 5.97 crore at 10% return rate
Rs 11.05 crore at 10% return rate