Finance Minister Nirmala Sitharaman on Wednesday launched the NPS Vatsalya scheme, allowing parents to invest in a pension account to secure their children’s future.
Parents can subscribe to NPS Vatsalya either online or by visiting a bank or post office. The minimum contribution to open a Vatsalya account is Rs 1,000, with an annual contribution of Rs 1,000 required thereafter. Guidelines for withdrawals from NPS accounts are currently being finalised.
At the launch, Finance Minister Nirmala Sitharaman highlighted that the NPS has delivered competitive returns, allowing people to save while securing future income. The NPS Vatsalya is an extension of the existing NPS, now available for children. Over the past 10 years, the NPS has gained 1.86 crore subscribers with an Asset Under Management (AUM) of ₹13 lakh crore.
Children below 18 years can open an NPS Vatsalya account, which will automatically convert into a regular NPS account when they turn 18. The pension will be available from the account only after the account holder reaches 60 years of age.
Finance Minister Nirmala Sitharaman stated that NPS has delivered returns of 14% on equity investments, 9.1% on corporate debt, and 8.8% on government securities (G-Secs).