NPS Vatsalya launched: Eligibility, how to open account, investment options and more

Union Finance Minister Nirmala Sitharaman launched the new pension scheme for minors, NPS Vatsalya, on Wednesday, September 18. The scheme will allow parents to invest in the pension accounts of their children and plan for their future.

Launching the scheme, FM Sitharaman said NPS has generated very competitive returns and offers the option to people to save while ensuring future income.

The Finance minister added NPS has generated 14 percent, 9.1 percent, and 8.8 percent returns for investments in equity, corporate debt and G-Secs, respectively.

The minimum contribution to open an account under the NPS Vatsalya scheme is Rs 1,000. Subscribers will have to contribute Rs 1,000 annually thereafter.

The eligibility criteria for the scheme is that one must be a citizen of India and the child must be under the age of 18.

The guidelines for withdrawal from NPS accounts are being finalised.

NPS Vatsalya scheme launch

NPS Vatsalya, announced in the FY25 Budget presented in July, is an extension of the already existing NPS for children. In the last 10 years, NPS has 1.86 crore subscribers with an Asset Under Management (AUM) of ₹13 lakh crore.

Many lenders, including ICICI Bank and Axis Bank, have joined hands with the PFRDA to launch the National Pension Scheme (NPS) Vatsalya.

ICICI Bank inaugurated the scheme's commencement at its service centre in BKC in Mumbai by registering a few children's accounts under NPS Vatsalya.

Financial Services Secretary Nagaraju Maddirala said the government will be receptive to subscriber feedback and improve the pension scheme accordingly.

"Ever since we have announced the proposed launch of the PM Vatsalya scheme, we have been getting feedback and suggestions to improve the scheme. As we go along and implement the Vatsalya scheme, we will try to improve so that concerns expressed in the last one week are taken care of," Maddirala said to PTI.

How to open an NPS Vatsalya account?

Children below the age of 18 years can open an NPS Vatsalya account, which will automatically get converted to a regular NPS account upon completion of 18 years of age. Pension will come from the account only upon attainment of 60 years of age.

The accounts can be opened both virtually and physically. One can visit designated Points of Presence (POPs) like banks, post offices and pension funds to open an account. Furthermore, an account can be opened through e-NPS as well.

Documents required for opening an NPS Vatsalya account

To open a Vatsalya account, these documents may be required:

• Proof of identity for the guardian/parent
• Address proof for the guardian/parent
• Birth certificate/Date of birth proof for minor
• If the guardian/parent is an NRI, NRE/NRO Bank Account (solo or joint) of the minor

Investment options available

A guardian/parent can select any of the PFRDA-registered pension funds:

• Aggressive LC-75 (75% equity)
• Moderate LC-50 (50% equity)
• Conservative LC-25 (25% equity)