What is NPS Vatsalya? Know about new pension scheme for minors
The scheme is intended to secure the financial future of children by enabling parents to make early contributions to a pension account. The Ministry of Finance describes this as a move to ensure long-term wealth creation through the power of compounding.
FollowThe Centre's much-awaited NPS Vatsalya Scheme will on Wednesday (September 18) be launched by Finance Minister Nirmala Sitharaman in New Delhi. Announced during the Union Budget 2024-25, the scheme aims to encourage early financial planning for children, providing parents and guardians a structured way to save for their child's future.
What is NPS Vatsalya?
NPS Vatsalya is designed to allow parents or guardians to open pension accounts for minors, making it one of the first schemes in India that introduces children to a pension system from an early age. Subscribers to the scheme will be issued Permanent Retirement Account Number (PRAN) cards, marking their formal entry into the National Pension System (NPS).
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Know key features of NPS Vatsalya:
1. Early financial security:
The scheme is intended to secure the financial future of children by enabling parents to make early contributions to a pension account. The Ministry of Finance describes this as a move to ensure long-term wealth creation through the power of compounding.
2. Flexible contributions:
Parents or guardians can start saving in their child’s name with contributions as low as Rs 1,000 annually. This makes the scheme accessible to families from all economic backgrounds, ensuring inclusivity.
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3. Transition to adult accounts:
Upon reaching adulthood, the child's account can be seamlessly converted into a regular NPS account, allowing for a smooth transition into long-term retirement savings.
4. Pension fund oversight:
The scheme will be regulated by the Pension Fund Regulatory and Development Authority (PFRDA), ensuring security and accountability.
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