NPS Vatsalya Scheme
NPS Vatsalya Scheme is launched by Union Finance Minister Nirmala Sitharaman on 18th September 2024 mainly to safeguard the Children’s Financial future. According to the announcement in the Union Budget 2024-25, the NPS Vatsalya scheme is released in New Delhi by Finance Minister. Government of India will issue Permanent Retirement Account Number (PRAN) cards to newly registered minors and the NPS Vatsalya Eligibility is completely monitored by Pension Fund Regulatory and Development Authority (PFRDA). For more Pension Schemes, follow www.employmentsamachar.in
What is NPS Vatsalya Scheme?
Parents under NPS Vatsalya Scheme save money for their children’s future by investing Rs.1,000/- minimum and there is no maximum amount annually in a pension account and the interest rate will be in compounding. NPS Vatsalya is good scheme for the families with lower economic backgrounds.
Scheme: A saving-cum-pension scheme regulated and administered by the PFRDA.
Eligibility: All minor citizens (age till 18 years).
Operations:
- Account opened in the name of minor and operated by Guardian.
- Minor to be the sole beneficiary.
Where to Open Account:
- NPS Vatsalya account can be opened through Points of Presence (POPs) which include major banks, India Post, Pension Funds, etc.
- Online platform (e-NPS).
Documents Required:
- KYC of Guardian by submitting Proof of Identity and Address (Aadhaar, Driving License, Passport, Voter ID card, NREGA Job Card, National Population Register).
- Date of Birth proof of the Minor (Birth certificate, School leaving certificate, Matriculation Certificate, PAN, Passport).
- NRE/NRO Bank Account (solo or joint) of the minor if the guardian is NRI.
Contribution:
- Opening contribution & Subsequent: Minimum Rs. 1,000 and no upper limit.
Pension Fund Selection: Guardian can choose any one of the Pension Funds registered with PFRDA.
Investment Choices:
- Default Choice: Moderate Life Cycle Fund – LC-50 (50% equity).
- Auto Choice: Guardian can choose Lifecycle Fund – Aggressive – LC-75 (75% equity), Moderate LC-50 (50% equity), or Conservative LC-25 (25% equity).
- Active Choice: Guardian actively decides allocation of funds across Equity (up to 75%), Corporate Debt (up to 100%), Government Securities (up to 100%), and Alternate Asset (up to 5%).
NPS Vatsalya Scheme Withdrawl, Exit And Death
- Withdrawal up to 25% of contribution after a lock-in period of 3 years allowed for education, specified illness, and disability. Maximum three times.
- Upon attainment of age of 18 years, seamless shift to NPS Tier – I (All Citizen).
- Exit allowed on attainment of 18 years of age:
- Corpus more than Rs.2.5 lakh: 80% of the corpus is utilized for the purchase of annuity and 20% can be withdrawn as a lump sum.
- Corpus less than or equal to Rs.2.5 lakh: Entire corpus can be withdrawn as a lump sum.
- On death, the entire corpus would be returned to the guardian.
eNPS facilitates:
NPS Registration – Opening of Individual Pension Account under NPS (only Tier I / Tier I & Tier II) by All Indian Citizens (including NRIs) between 18 – 65 years.
NPS Contribution – Making initial and subsequent contribution to your Tier I as well as Tier II account.
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