NPS Vatsalya provides flexible contribution and investing options, allowing parents to contribute Rs. 1,000 per year in the child’s name, making it accessible to families from all financial circumstances.Parents can use NPS Vatsalya to save for their children’s future by opening a pension account and leveraging compounding for a lifetime of wealth.
In July Union Budget 2024-25 announcement, Union Minister for Finance and Corporate Affairs Nirmala Sitharaman launched NPS Vatsalya, a pension program for children. This campaign was implemented in 75 sites around the country, with more than 250 PRANs (permanent retirement account numbers) assigned to young subscribers.
What is NPS Vatsalya :
Parents can use NPS Vatsalya to save for their children’s futures through a pension account, taking advantage of compounding for long-term prosperity. NPS Vatsalya offers flexible contribution and investment options, allowing parents to deposit Rs. 1,000 per year in the child’s name, making it affordable for families of all income levels.
The finance minister stated that NPS Vatsalya represents a big step forward in the government’s efforts to promote long-term financial planning and security for all citizens. In addition to protecting subscribers’ futures, the program is based on the notion of intergenerational equity, which includes coverage for both older and younger family members.
Sitharaman suggests that NPS Vatsalya might help young subscribers develop savings habits and accumulate large wealth through compounding. She emphasized that the initiative aims to create a respectable living for persons in their older years.
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eNPS online platform for NPS Vatsalya :
The NPS Trust website states, “The online platform (eNPS) is the easiest way to register an NPS Vatsalya account. This system allows you to set up an NPS Vatsalya account and make additional contributions. You can select one of the following CRAs:
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Protean
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KFintech
- CAMS NPS
Eligibility for NPS Vatsalya is as follows :
- All minor citizens (age below 18 years)
- Accounts can be opened in the name of minors and operated by their parents or guardians. The minor will be the beneficiary.
- The scheme can be opened through several points of presence controlled by PFRDA, including as major banks, India Post, pension funds, and an online portal (e-NPS).
- Subscriber must make a minimum contribution of Rs 1000/- per year. There is no limit to the maximum contribution.
- PFRDA will give users with a variety of investing options. Subscribers can invest in government securities, corporate debt, and stock in varying proportions based on their risk tolerance and expected returns.
- After attaining the age of majority, the plan can be simply changed into a regular NPS account.
Documents necessary to open an NPS Vatsalaya account :
Documents required according to the NPS Trust website:
- Proof of a minor’s date of birth (birth certificate, school leaving certificate/matriculation certificate, PAN, and passport)
- Guardian KYC requires providing proof of identity and address (Aadhaar, Driving License, Passport, Voter ID card, NREGA Job Card, and National Population Register).
- NRE or NRO bank account (solo or joint) for the minor if the guardian is an NRI.
Benefits of investing in NPS Vatsalya :
Parents who start early can take advantage of compounding to assure significant increase over time. NPS Vatsalya was created to make long-term financial planning accessible to all families. Parents or guardians can begin investing for their child’s future with contributions of starting at as Rs 1,000 each year.
The eligibility requirements are simple: any minor Indian citizen under the age of 18 can participate, with the guardian managing the account. This program ensures that financial security begins at an early age, laying the groundwork for the child’s future success. The plan also offers an easy-to-use online portal for parents and guardians to open and manage accounts. Families can easily set up and contribute to their child’s pension account from the comfort of their own home using the https://nps.kfi.ntech.com/ portal.
This digital method simplifies the process, ensuring that more families can benefit from the initiative and ensure their children’s financial future.”
The NPS Vatsalya system was introduced as a savings-cum-pension system, allowing parents to invest in an NPS account on behalf of their minor children. The account will be registered in the minor’s name and handled by the parent or guardian. One of the important benefits is that the account can be converted into a conventional NPS Tier-I account for the child once he or she reaches the age of 18. This may assist to promote the NPS Scheme to young people and urge them to continue with it in the future. It may also function as a means for parents/guardians to guarantee their children’s future by making regular payments to the minor’s NPS account.