What is NPS Vatsalya Scheme?

About NPS Vatsalya  Scheme:

• It is an extension of the existing National Pension Scheme (NPS) but focuses on children.
• Eligibility for NPS Vatsalya as follows
  • All minor citizens (age below 18 years).
  • Both the child and the parent must be Indian citizens. All parties must comply with the Know Your Customer (KYC) requirements.
  • Account can be opened in the name of minor and operated by parent or guardian. Minor will be the beneficiary.
  • Scheme can be opened through various Points of presence regulated by Pension Fund Regulatory Authority of India (PFRDA)such as major banks, India Post, Pension Funds and Online platform (e-NPS).
  • Contribution: Subscriber to make a minimum contribution of Rs 1000/- per annum. There is no limit on the maximum contribution.
• PFRDA will provide multiple investment choices to subscribers. Subscribers can take exposure in government securities, corporate debt, and equity in different proportions based on risk appetite and desired returns.
• On attaining the age of majority, the plan can be converted seamlessly into a normal NPS account. 
• Withdrawal rules
  • After three years of opening the NPS vastsalya account, partial withdrawals are allowed. Up to 25% of the corpus can be withdrawn for specific purposes, including education, medical treatment for certain illnesses, or disabilities over 75%.
  • Once the child attains the age of 18, the corpus of up to Rs 2.5 lakh can be withdrawn entirely and if it exceeds, the 20% can be withdrawn and rest 80% can be used for annuity purchase in the NPS.
• In the unfortunate event of a subscriber's death, the entire corpus is given to the nominee, usually the guardian. If the guardian dies, a new guardian must be assigned after completing a new KYC.
• If both parents die, a legal guardian can manage the account without further contributions until the child turns 18.