Union Finance Minister Nirmala Sitharaman has officially launched the much-anticipated NPS Vatsalya, an online platform under the National Pension Scheme (NPS) designed specifically for young subscribers. This new initiative allows parents or guardians to start saving for their minor children, with an option to convert the account into a standard NPS Tier 1 account when the child reaches adulthood.
Managed by the Pension Fund Regulatory and Development Authority (PFRDA), NPS Vatsalya provides a long-term investment opportunity for Indian citizens, including Non-Resident Indians (NRIs). Under this scheme, legal guardians can open accounts for minors, which must be registered in the child’s name. Upon registration, each minor subscriber will receive a Permanent Retirement Account Number (PRAN) card.
ICICI Bank launched NPS Vatsalya at its Bandra Kurla Complex (BKC) service center in Mumbai, Maharashtra. As outlined in the Union Budget for 2024-2025, parents or guardians can contribute to the account until the child turns 18.
Key Features of NPS Vatsalya:
- Eligibility:
- Minors under the age of 18 who possess a PAN card can join the scheme.
- Minimum Investment Amount:
- A minimum annual contribution of ₹1,000 is required, with no upper limit on the amount that can be contributed.
- Contributors:
- Parents or guardians can contribute to the account on behalf of the child.
- Transition at Age 18:
- Once the child reaches 18, the account can be converted to a standard NPS account by providing the necessary KYC documents.
How to Open an NPS Vatsalya Account:
- NPS Vatsalya accounts can be opened through various Points of Presence (POPs), including major banks, India Post, pension funds, and via the online platform, e-NPS.
- ICICI Bank marked the scheme’s inauguration by registering a few children under NPS Vatsalya, issuing symbolic PRAN cards to the new subscribers.
The launch of NPS Vatsalya was first announced in the Union Budget 2024-25, aiming to promote financial security for the younger generation and facilitate early savings habits among minors.
