Finance Minister Nirmala Sitharaman proposed introducing a new scheme, NPS Vatsalya, in her Budget 2024 speech. This scheme will be a National Pension Scheme (NPS) for minors, allowing parents to contribute a certain amount on behalf of their children towards NPS to secure their future and help them develop a retirement fund.
In this article, we’ll tell you everything about the recently launched new Scheme for Minor. Though amendments and changes are possible in the scheme rules, we’ll be explaining to you what the Finance Minister stated in her budget speech. Read on to learn all about the NPS Vatsalya Scheme and its eligibility, benefits, and applicability.
Table of Contents
- 1 Major Highlights: NPS Vatsalya Scheme 2024
- 2 What Is The NPS Vatsalya Scheme?
- 3 Who Is Eligible For The NPS Vatsalya Scheme?
- 4 Benefits Of The Newly-launched Scheme
- 5 New and Major Guidelines 2024
- 6 Necessary Documents You’ll Need
- 7 Top NPS Schemes You Can Invest In
- 8 How To Register For The NPS Vatsalya Scheme?
- 9 FAQs
Major Highlights: NPS Vatsalya Scheme 2024
| Article Topic | NPS Vatsalya Scheme For Minors |
| Announced By | FM Nirmala Sitharaman |
| Announced On | 23rd July 2024 |
| Application Mode | Online |
| Full For Of NPS | National Pension Scheme |
| Pension For | Indian Citizens/ NRI’s/ OCI’s/ Kids |
| Objective | Securing Future With Long-term Investments |
| Online Registration Link | https://enps.nsdl.com/ |
| New Guidelines | Available Now |
| Official Portal | https://enps.nsdl.com/ |
What Is The NPS Vatsalya Scheme?
The National Pension Scheme (NPS) Vatsalya Scheme, which is part of the Budget 2024 proposal, allows parents and guardians to initiate an NPS for their offspring. Through this program, parents and guardians can register an NPS account for their kids and make monthly or annual contributions until the kid turns 18 years old.
The NPS Vatsalya plan can be transformed into a conventional NPS account that the child can handle on their own once they reach the age of majority (18 years). When the child turns eighteen, the accumulated contribution amount in the NPS Vatsalya account will be moved to the regular NPS account.
An extension of the current NPS designed specifically for youth is the NPS Vatsalya scheme. Through this program, parents can open accounts and make contributions to their children’s retirement funds.
Individuals can support their retirement needs with pension income through the Central Government’s NPS system. Therefore, one of the best retirement plans that ensure the child’s financial security is the NPS Vatsalya scheme.
Who Is Eligible For The NPS Vatsalya Scheme?
Every guardian or parent can apply for the scheme. Here are some major ones who can register under this Vatsalya Yojana.
- Individual Subscribers: You just need to be between 18 years to 70 years of age to contribute to the NPS Vatsalya Scheme.
- Government Employees: The age requirement remains 18 to 70 years and you must have contributions to use NRE and NRO A/c.
- Corporate Employees: All the corporate employees who opt for NPS are eligible to apply for the NPS Vatsalya Scheme.
- NRI and OCI: You must be aged between 18 and 70 years and have active contribution to the NPS Scheme.
- GDS Subscribers: The applicants’ age should be between 18 to 65 years and covered under SDBS.
- APY Subscribers: The age criteria remains 18 to 40 years and you should also not be paying any taxes.
Benefits Of The Newly-launched Scheme
This scheme is launched for long-term investments and future benefits. Let’s take a look at the potential benefits of this newly-launched scheme.
- NPS Vatsalya offers families a systematic approach to ensuring their children’s future financial security.
- This Scheme is a valuable tool for securing a child’s financial stability and developing a retirement corpus.
- The NPS Vatsalya Scheme encourages children to develop savings habits from a young age. By the time they turn 18, the account transitions into a standard NPS scheme, allowing them to manage and contribute to it independently.
- This early introduction to savings helps accumulate a substantial corpus by retirement, promoting long-term financial planning.
- Opening an NPS Vatsalya account while the child is still a minor offers significant benefits. It instills the importance of saving early and starting investments to achieve good returns.
- As the account converts to a standard NPS account upon reaching adulthood, it supports responsible financial management.
- When the child becomes an adult, the NPS Vatsalya account transitions into a standard NPS account. This conversion enables them to start contributing independently, ensuring a robust financial foundation for a comfortable retirement.
- By allocating 40% of the accumulated NPS amount to an annuity plan, they can secure reliable returns for their future.
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New and Major Guidelines 2024
As stated by the Finance Minister, Shrimati Nirmala Sitharaman, the NPS Vatsalya Scheme comes with some new guidelines. We’ve mentioned the same as follows:
- As per this scheme, any parent or guardian can invest a decent amount for their minor kid.
- No matter whether you are a government employee or a private sector employee, you can easily invest in the NPS Vatsalya Yojana 2024.
- As soon as the kid reaches 18 years of age, the account will be turned into a standard account.
- Also, the minor is free to change the account to non-NPS when they turn 18 years old.
- During their retirement period, the person can withdraw 60% of the total amount from the NPS account.
Necessary Documents You’ll Need
As with applying for any other scheme, you’ll need certain documents to apply for the Vatsalya Scheme. Let’s take a look at the required documents:
- Applicant’s Aadhar Card
- Domicile Certificate
- PAN Card
- Income Certificate
- Passport-sized Photographs
- Signature
- Address Proof
- Bank Passbook
- Birth Certificate
Top NPS Schemes You Can Invest In
This new scheme is quite beneficial in the long-term and it operates under the National Pension Scheme. Here are some of the top schemes as per the NPS site you can invest in:
- SBI Pension Funds
- LIC Pension Fund
- UTI Retirement Solutions
- HDFC Pension Management Company
- ICICI Prudential Pension Fund Management
- Kotak Mahindra Pension Fund
- Aditya Birla Sunlife Pension Management
- Tata Pension Management
- Max Life Pension Fund Management
- Axis Pension Fund Management
How To Register For The NPS Vatsalya Scheme?
- Step 1: Visit NPS’s official website which is enps.nsdl.com.
- Step 2: Now from the home page select the category.
- Step 3: Then click on the Create Account option.
- Step 4: Fill out all the entries and proceed to the OTP verification.
- Step 5: Once the OTP is entered, a new page will open. Here, you have to upload the necessary documents.
- Step 6: Finally, submit all the details by clicking on the Submit button.
- Step 7: In this way, citizens can create NPS accounts themselves by sitting at their homes. However, if you encounter issues, you can simply contact the NPS authorities.
FAQs
Ques 1. When was the NPS Vatsalya Scheme launched?
Ans. The Scheme is launched on the 23rd of July 2024 during the presentation of the Union Budget 2024.
Ques 2. What is the NPS Vatsalya Scheme 2024?
Ans. The Scheme was launched to provide pensions even to minors as per the investments made by the kids’ parents till the age of 18.
Ques 3. Can I switch the NPS Vatsalya account to a non-NPS account?
Ans. After you attain 18 years of age, you can choose whether to opt for the standard NPS account or switch to a non-NPS account.