NPS Vatsalya Scheme is available for minors in India to contribute and make investment for their future. Individuals’ parents and guardians are responsible for accounts, investments and contributions until the child reaches 18. The minimum contribution limit for It is ₹1,000 and this lowest requirement allows all types of families to take benefit from It.
National Pension Scheme Vatsalya Scheme
The NPS Vatsalya Scheme is a contribution plan for minors up to the age of 18 in India which is administered by the Pension Fund Regulatory and Development Authority. The scheme was announced in the Union Budget of the current financial year to encourage youngsters to save money by making investments and secure their future.
Parents can open an NPS Vatsalya Scheme account on the behalf of their children and make monthly contributions of ₹1,000. This account is managed by the parents until the child reaches 18 and after that the account will be changed to a regular NPS account or other non-NPS scheme.
Who is eligible for the NPS Vatsalya Scheme?
The eligibility criteria for the National Pension Scheme Vatsalya Scheme for the interested individuals to contribute and take benefit is discussed here.
- Individuals’ age must be under 18 years because It targets only young individuals of India.
- India residency requirement is mandatory to fulfil by the interested individuals and non-indians are not eligible to benefit from It.
- It is available for minors but guardians or parents are responsible for contribution and managing the account until the minor reaches adulthood.
- Minor individuals must provide date of birth proof and other documents to be eligible for NPS Vatsalya scheme.
- Each qualifying minor is eligible for only one NPS Vatsalya Scheme account.
How much can I contribute to the NPS Vatsalya Scheme?
A minimum of ₹1,000 contribution is required and there is no upper limit to open a National Pension Scheme Vatsalya Scheme account. After the initial opening of an account, individuals can contribute as per their financial circumstances. A minimum of ₹1,000 allows all family backgrounds to take part in It.
The National Pension Scheme Vatsalya Scheme allows young individuals to make long-term investment for their future and it can help them to save upto 10 crore until if they invest ₹10,000 monthly.
It maintains equality among all types of families whether they have low income or higher incomes. It’s the best option to save and secure a child ‘s future by making investments from their birth to adulthood.
What are the benefits of the National Pension Scheme Vatsalya Scheme?
The NPS Vatsalya Scheme offers many benefits to its young children which are discussed below.
Long-term Financial Security:
- It offers long-term financial security because young individuals can contribute until the age of 18 years and after reaching 18 this account sees transition. Individuals can save as per their choice from birth to adulthood and this financial foundation can be used for higher education, starting a business, or any other significant life event.
Flexible Contributions:
- It offers flexible contributions so all types of families can benefit from it. The minimum contribution requirement is ₹1,000 while there is no upper limit. This flexible contributions limit allows guardians or parents of minors to invest according to their capacity.
Financial Literacy:
- It enhances financial literacy by allowing and promoting savings at a young age. It also helps children to make a habit of saving and investing for future security.
Transition of Account:
- When the young individual is under 18, the account is handled by guardians or parents but after the age of 18 it will be transferred to a regular NPS account or another non-NPS scheme so the minors can continue benefiting from the scheme.
How can I apply for the National Pension Scheme Vatsalya Scheme?
The step by step apply process of National Pension Scheme Vatsalya Scheme is given below:
- Individuals can apply through online and offline, the eNPS platform is available for the online method which is more convenient then offline.
- Individuals can apply offline through physical Points of Presence (PoPs), which include major banks, India Post, and pension funds. A whole list of eligible PoPs is available on the official website of PFRDA.
- After choosing the method individuals have to complete all the requirements after going to the NPS Vatsalya section on the official website or by visiting the PoPs.
- After filing application forms, provide documents for both the minor and the guardian and then submit the form by double checking all given information.
- After the submission of application, individuals have to make an initial contribution to activate the NPS Vatsalya account.
