On Tuesday, the NPS Vatsalya program was introduced by Finance Minister Nirmala Sitharaman. This scheme enables parents to invest in a pension account and prepare for their children’s future.
Parents can visit a bank or post office, or sign up online, to enroll to NPS Vatsalya. To start a Vatsalya account, you must deposit at least Rs 1,000. After that, subscribers would need to pay Rs 1,000 a year.
Finalizing the procedures for withdrawal from NPS accounts is underway.
At the program’s launch, Sitharaman stated that NPS has produced extremely competitive returns and gives consumers the choice to save while guaranteeing their earnings in the future.
What is NPS Vatsalya?
NPS Vatsalya is an extension of the already existing NPS to children. In the last 10 years, NPS has 1.86 crore subscribers with an Asset Under Management (AUM) of Rs 13 lakh crore.
Children below the age of 18 years can open NPS Vatsalya account, which will automatically get converted to regular NPS account on completion of 18 years of age. Pension will come from the account only upon attainment of 60 years of age.
NPS has generated 14 per cent, 9.1 per cent, and 8.8 per cent returns for investments in equity, corporate debt and G-Secs, respectively, Sitharaman said.
Children below the age of 18 years can open NPS Vatsalya account
NPS Vatsalya was announced in the FY25 Budget presented in July.
Many lenders, including ICICI Bank and Axis Bank, have joined hands with the PFRDA to launch National Pension Scheme (NPS) – Vatsalya.
ICICI Bank inaugurated the scheme’s commencement in Mumbai at its service centre by registering a few children’s accounts under NPS Vatsalya.
Financial Services Secretary Nagaraju Maddirala said the government will be receptive of subscriber feedback and improve pension scheme accordingly.
“Ever since we have announced the proposed launch of PM Vatsalya scheme, we have been getting feedback and suggestions to improve the scheme. As we go along and implement the Vatsalya scheme, we will try to improve so that concerns expressed in the last one week are taken care,” Maddirala said.
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