NPS Vatsalya Yojana
Parents worry about their child’s future. For this, parents invest in many schemes and insurance companies. Now to secure the future of children, the Government of India has introduced NPS Vatsalya Scheme.
Pension account of minor children will be opened under NPS Vatsalya Yojana. In this scheme, parents can invest for children. When they grow up, this NPS account will be converted into regular NPS.
Finance Minister Nirmala Sitharaman has launched NPS Vatsalya Yojana on 18 September. While launching the NPS scheme, the finance minister has distributed Permanent Account Retirement Account Number (PRAN) to nine children.
Finance Minister Nirmala Sitharaman had announced this scheme while presenting Budget 2024. After this, now the finance minister has launched the Vatsalya Scheme. Let us know what is NPS Vatsalya Yojana and how can you take advantage of it?
What is Vatsalya Scheme?
NPS Vatsalya Yojana has been designed to secure the future of minor children. Under this, parents can open an account for their minor children. Under this, parents can invest money for children.
NPS Vatsalya will be converted into regular NPS when the child turns 18. Later, the children’s NPS account will be converted into a fund which is a kind of security for the children.
Who can invest?
Under NPS Vatsalya Yojana, accounts will be opened by the child’s parents. All parents, guardians, whether Indian or NRI, are eligible for this scheme.
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Where to open an account?
To open an account under NPS Vatsalya Yojana, the government has launched the e-NPS portal (https://app.camsnps.com/CRA/auth/enps/register?source=eNPS). Accounts can be opened on this portal through many big banks and post offices.
First of all, the guardians have to register. Also, KYC has to be submitted while opening the account. This scheme will be regulated by PIFRDA (Pension Fund Regulatory and Development Authority).
63 lakh return
In NPS Vatsalya Yojana, parents have to invest at least 1 thousand rupees annually. There is no limit on investing money. If you do a SIP of Rs 10,000 in this scheme, you will get a huge return.
If the child is 3 years old and the parents do a SIP of Rs 10,000, then when the child turns 18, a fund of Rs 18 lakh will be deposited in his name. After this, the NPS Vatsalya account will become regular. After that the account holder can transfer that fund or continue to invest in it further.
How to withdraw money?
Under the NPS Vatsalya Yojana, the minor pension account of the child will run till the child turns 18 years old. After that the money can be withdrawn. Apart from this, he can also close this account. There are some rules for this too.
What is annuity?
Let’s understand what annuity is. Annuity is an insurance product. There is a contract between the person and the insurance company. In this, the person has to invest together.
In the future, the person is paid every month in return. It is also called a retirement plan in a way. As long as the person is alive, he keeps getting income. At the same time, after the death of the person, the money is given to the nominee of the person.
How to withdraw before becoming an adult?
It is possible that the money may be needed before the child turns 18 years old. There are some rules for withdrawing money before the child turns 18 from the account opened under NPS Vatsalya Yojana.
You can withdraw money before the child turns 18.
- Minor pensioners can withdraw money only after 3 years of opening the account.
- Only 25% of the money deposited in this account opened for the child can be withdrawn.
- Until the minor child turns 18, a small amount of money can be withdrawn from the account only 3 times.
- Money can be withdrawn from the account only in some cases including treatment of illness and education.