NPS Vatsalya Scheme 2025

1. Financial Security: It ensures long-term financial stability by helping youngsters build a safe retirement corpus.

1. Savings discipline: It establishes a disciplined saving habit early on.

1. Contributions that can be customised: There is no upper limit on the range of possible contributions.

1. Retirement Planning: Complies with the goal of the central government to provide post-retirement requirements through pensions.

The government hopes to promote early financial planning and provide a better, independent future for the next generation by launching the NPS Vatsalya Scheme.

NPS Vatsalya Scheme Overview

The overview of the NPS Vatsalya Scheme is given below:

Features of NPS Vatsalya

Some of the features of NPS Vatsalya are given below:

1. The guardian operates the account on behalf of the child until the child turns 18.

1. Upon reaching majority, the account is transferred to the child’s name, allowing them to continue managing it with the existing corpus.

1. After the child turns 18, the account transitions into the NPS-Tier 1 Account - All Citizen Model or another non-NPS scheme, based on their preference.

1. A unique Pension Retirement Account Number (PRAN) is issued in the minor's name by the Central Recordkeeping Agency (CRA).

1. A new Know Your Customer (KYC) verification is conducted within three months after the child turns 18, enabling them to take control of the account.

1. The characteristics, advantages, and departure procedures of the NPS-Tier I for All Citizens Model will be applicable upon changeover.

Contribution Details:

1. Minimum Contribution: Rs.1,000 annually.

1. Maximum Contribution: No upper limit.

1. The initial enrollment requires a contribution of Rs.1,000.

Withdrawal and Exit Options:

The scheme provides options for partial withdrawals and account closure, ensuring flexibility for unforeseen needs.

NPS Vatsalya Eligibility

The eligibility criteria to apply for NPS Vatsalya are given below:

1. Applicants should be Indian citizens and below 18 years of age.

1. Non-Resident Indians (NRIs) and Overseas Citizens of India (OCI) who are below 18 years of age are also eligible.

1. Parents or guardians open and manage the account until the child becomes an adult.

1. They act as nominees under the scheme, ensuring the child remains the sole beneficiary.

NPS Vatsalya Scheme Applicability

All parents and guardians of minor children are covered by the NPS Vatsalya Scheme. The parents will make a minimum contribution into the NPS Vatsalya account until the child turns eighteen. The NPS Vatsalya account will be changed to a regular NPS account after the child turns 18, at which point they will be able to manage the regular NPS account on their own. This program gives families a new investing choice for their children's retirement and financial stability by extending the NPS to include minor children.

How to Apply for NPS Vatsalya Scheme?

The steps to apply for NPS Vatsalya Scheme are given below:

1. Visit the official eNPS website.

1. Scroll to the ‘NPS Vatsalya (Minors)’ section and select the ‘Register Now’ option.

1. Enter the guardian’s date of birth, PAN, mobile number, and email address, then click ‘Begin Registration’.

1. Input the OTP sent to the registered mobile number and email.

1. Upon OTP verification, an acknowledgement number will appear on the screen. Click ‘Continue’ to proceed.

1. Submit Minor’s Details

1. Enter the minor's and guardian's personal information, upload the necessary documents, and confirm the details.

1. Make the required initial deposit of Rs.1,000.

1. Authenticate Registration

1. Complete authentication using dual OTP or eSign.

1. A unique Pension Retirement Account Number (PRAN) is generated, and the account is successfully opened in the minor’s name.

NPS Vatsalya Documents Required

Given below is the list of documents required to apply for NPS Vatsalya:

1. Date of birth documentation for the minor (birth certificate, certificate of school leave, certificate of matriculation, PAN, and passport) 

1. Proof of identity and address (Aadhaar, driver's license, passport, voter ID card, NREGA job card, and national population register) must be submitted in order to complete the Guardian's KYC.

1. The Guardian's Permanent Account Number (PAN) or Form 60 declaration (Rule 114B).

1. The minor's NRE or NRO bank account, either alone or jointly, if the guardian is an NRI or OCI.

Options for Investments Under NPS Vatsalya

The following investment options are available through the NPS Vatsalya Scheme:

1. The LC-50, a moderate lifecycle fund with 50% equity, is the default option.

1. Moderate Lifecycle Fund (LC-50; 50% equity), Conservative Lifecycle Fund (LC-25; 25% equity), or Aggressive Lifecycle Fund (LC-75; 75% equity) are the auto-choice options.

1. Active Choice: Parents have the ability to actively choose how much money should be divided between corporate debt (up to 100%), government securities (up to 100%), equity (up to 75%), and alternative assets (up to 5%).

How Can I Participate in the NPS Vatsalya Scheme?

The NPS Vatsalya Scheme can be accessed by parents or guardians via the approved Point of Presence (POP) or the eNPS website. Once the account has been created, people can contribute to it via the eNPS website or the authorised Point of Presence (POP) where the account was created.

NPS Vatsalya Withdrawal and Exit Regulations

Partial withdrawal is permitted under the NPS Vatsalya Scheme prior to the child's 18th birthday. The following requirements must be met in order to partially withdraw funds from the NPS Vatsalya account:

1. After three years of joining the NPS, parents or guardians may leave.

1. They are able to take out up to 25% of what they have contributed.

1. Until the child turns 18, the withdrawal option is only available three times.

1. According to the PFRDA, they may withdraw for educational purposes, for the treatment of specific illnesses, for a disability of more than 75%, etc.

Conditions for Withdrawal Upon Exit

1. Annuity Reinvestment

• A minimum of 80% of the total corpus must be reinvested in an annuity plan. 
• The remaining 20% can be withdrawn as a lump sum.

1. Complete Lump Sum Withdrawal

• If the total accumulated corpus is below Rs.2.5 lakh, the entire amount can be withdrawn as a lump sum.

Rules in Case of Death

1. If the Subscriber (Minor) Passes Away

• The entire corpus is paid to the guardian who is the registered nominee.

1. If the Guardian Passes Away

• A new guardian must be registered under the scheme by completing fresh KYC.

1. If Both Parents Pass Away

• The legal guardian can continue the account without making additional contributions until the minor reaches 18 years.

This ensures flexibility and security for both the minor and the guardian in managing the NPS Vatsalya account.

Why You Must Consider Investing in NPS Vatsalya

Given below are some of the reasons you must consider NPS Vatsalya as a good investment option:

1. The scheme encourages children to develop early saving habits. Once they turn 18, the account transitions into a standard NPS account, enabling them to manage and contribute independently.

1. The NPS Vatsalya account ensures portability, allowing seamless conversion into a regular NPS account upon majority. This account can be managed throughout the individual’s lifetime, providing a robust retirement corpus without interruptions due to career changes.

1. By introducing children to pension concepts and savings management, the scheme fosters financial literacy and responsible financial planning from a young age.

1. With contributions starting during childhood, the scheme builds a substantial retirement corpus. At retirement, 60% of the accumulated amount can be withdrawn, while 40% must be allocated to an annuity plan, ensuring a steady income in later years.

1. Early contributions take advantage of the power of compounding, leading to significant wealth accumulation by the time of retirement.

1. The automatic conversion of the NPS Vatsalya account into a Tier-I NPS account at 18 ensures uninterrupted investment growth and financial security.

1. The scheme provides families with a structured approach to securing their children’s financial future, preparing them for a stable and dignified retirement.

1. By promoting disciplined savings and long-term planning, the scheme ensures children benefit from wealth creation and financial independence.

1. The scheme aligns with the government’s goal of enhancing financial stability and promoting financial planning across generations, ensuring comprehensive financial security.

The NPS Vatsalya Scheme not only builds a retirement corpus for the child but also instills critical financial management skills, promoting a culture of savings and investment from an early age.