एनपीएस वात्सल्य योजना

NPS Vatsalya Scheme – Details

Overview

The “NPS Vatsalya” scheme was announced by the Hon’ble Finance Minister in the Union Budget for FY 2024-25. It is designed to enable parents or legal guardians to open and contribute to a National Pension System (NPS) account for a minor. Once the child turns 18, the account will automatically convert into a standard NPS Tier-I account.

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Key Features

Who Can Apply

• Any minor Indian citizen (below 18 years) is eligible.

• The account must be opened by a natural or legal guardian on behalf of the child.

• Court-appointed guardians must provide a valid court order and comply with KYC norms as per PFRDA guidelines.

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Investment Options

1. Default Option:

   • Moderate Lifecycle Fund (LC-50): 50% equity allocation.

2. Auto Choice:

   • Aggressive Lifecycle Fund (LC-75): 75% equity.

   • Moderate Lifecycle Fund (LC-50): 50% equity.

   • Conservative Lifecycle Fund (LC-25): 25% equity.

3. Active Choice:

   • Parents/guardians can allocate funds across:

     • Equity (up to 75%)

     • Government securities (up to 100%)

     • Corporate debt (up to 100%)

     • Alternate assets (up to 5%)

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Contributions

• At Account Opening: Minimum ₹1,000; no upper limit.

• Subsequent Contributions: Minimum ₹1,000 per year; no upper limit.

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Conversion at Age 18

• On turning 18, the minor’s account automatically transitions to an NPS Tier-I account (All Citizen Model).

• Fresh KYC must be completed within 3 months of reaching majority.

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Withdrawals & Exit Provisions

Partial Withdrawals (Before Age 18)

• Allowed up to 25% of the subscriber’s contributions (excluding returns) after 3 years of account opening.

• Can be withdrawn a maximum of three times before the subscriber turns 18.

• Permitted for:

  • Education of the subscriber

  • Treatment of specified illnesses

  • Disability exceeding 75%

  • Other reasons as specified by PFRDA

• Withdrawal is based on self-declaration.

In Case of Minor’s Death

• Full accumulated pension wealth is payable to the registered guardian.

In Case of Guardian’s Death

• A new guardian must be registered with valid KYC documentation.

• If both parents pass away, a legally appointed guardian may continue the account—with or without contributions—until the subscriber turns 18. The subscriber may then choose to continue or exit the scheme.

Exit After Age 18

• Subscriber can exit the scheme only after attaining 18 years.

• At exit:

  • Minimum 80% of the accumulated pension wealth must be used to purchase an annuity.

  • Remaining 20% can be withdrawn as a lump sum.

• If total pension wealth is ₹2,50,000 or less, or if annuity purchase is not possible through empanelled providers, the entire amount may be withdrawn.

All exits and withdrawals are subject to the PFRDA (Exits and Withdrawals under the National Pension System) Regulations, 2015, and any subsequent amendments.

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Benefits

• Helps children start saving for retirement early.

• Promotes financial literacy and discipline from a young age.

• Seamless conversion to a regular NPS Tier-I account at 18 with no extra paperwork.

• Partial withdrawals offer flexibility for essential needs such as education or medical expenses.

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Eligibility

• Indian citizens under 18 years of age.

• Account to be opened and operated by a natural or legal guardian.

• KYC compliance mandatory as per PFRDA norms.

• Court-appointed guardians must submit relevant court orders and KYC documentation.

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How to Apply

Online Process

1. Visit the official NPS Trust website: https://npstrust.org.in

2. Click on “Open NPS Vatsalya” on the homepage.

3. Choose one of the three Central Recordkeeping Agencies (CRAs).

4. Enter basic details of the minor and guardian. Authenticate using OTP.

5. Guardian’s KYC (Name, DOB, Gender, Address, Photo) will be auto-fetched via UIDAI or CERSAI. Upload minor’s proof of date of birth.

6. Fill in FATCA declaration and select an investment option.

7. Complete OTP verification via email and mobile number.

8. Make an initial contribution of minimum ₹1,000.

9. Upon successful payment, a Permanent Retirement Account Number (PRAN) is generated.

Offline Mode

Also available through designated NPS Points of Presence (PoPs).