NPS Vatsalya

In pursuance of the announcement in the Union Budget 2024-25, the launch of the NPS Vatsalya scheme was on September 18, 2024. It is a saving-cum-pension scheme regulated and administered by the Pension Fund Regulatory and Development Authority (PFRDA).

About the scheme

NPS-Vatsalya is a financial investment that parents/guardians can make on behalf of their minor children with minimum contribution of Rs 1000 per year and no limit on maximum contribution, serving as a meaningful way to provide them with financial support until they start earning and investing on their own.

Eligibility

• Any Citizen of India
• Age up to 18 years
• KYC Compliant

Why Join NPS-Vatsalya?

• Protection against uncertainty and long-term financial security
• Teaching financial responsibility (concept of pension planning)
• Encouragement for long-term investment
• Flexibility in future financial planning
• Benefits of compound interest with long-term investment 

How to open account

• Documents Required
  • KYC of Guardian by submitting Proof of Identity and Address (Aadhaar, Driving License, Passport, Voter ID card, NREGA Job Card, National Population Register).
  • Date of Birth proof of the Minor (Birth certificate, School leaving certificate, Matriculation Certificate, PAN, Passport).
  • NRE/NRO Bank Account (solo or joint) of the minor if the guardian is NRI.
• NPS Vatsalya account can be opened through Points of Presence (POPs) which include major banks, India Post, Pension Funds, etc.
  Online platform (e-NPS).
• Contribution :
  • Opening contribution: Minimum Rs. 1,000 and no upper limit.
  • Subsequent contribution: Minimum Rs. 1,000 per annum and no upper limit.

Operation of the account

1. Account opened in the name of minor and operated by Guardian. Minor to be the sole beneficiary
2. Before Turning 18 years of age - Partial withdrawals before subscriber turns 18
   • After 3 years of joining NPS
   • Up to 25% of contributed amount
   • Available 3 times till subscriber turns 18
   • Partial withdrawals can be made for the purposes of education, treatment of specified illnesses, disability of more than 75%, etc., as specified by PFRDA
3. After Turning 18 years of age
   • Subscriber can continue this NP Account beyond the age of 18 years
   • Account converted into a regular All Citizen NPS Account
   • Fresh KYC of minor within 3 months of turning 18
   • Subscriber can exit NPS
     • At least 80% of accumulated corpus is re-invested into an annuity plan and the remaining 20% can be withdrawn as a lump sum
     • If accumulated corpus ≤ Rs 2.5 lakh, entire amount can be taken as lump sum
4. In unfortunate cases of death
• Death of subscriber: Entire corpus returned to guardian (guardian is the nominee)
• Death of guardian: Another guardian to be registered through fresh KYC
• Death of both parents: Legal guardian can continue without making contributions until subscribers attains 18 years of age

For more information visit https://www.sbipensionfunds.co.in/nps-categories/nps-vatsalya/