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NPS Vatsalya Scheme: Everything You Need to Know

Jul 26, 2024

In the Union Budget speech for 2024-25, Finance Minister Nirmala Sitharaman introduced a new scheme designed specifically for minors, NPS Vatsalya. This new initiative allows parents and guardians to contribute to NPS on behalf of their children to help secure their future. Read on to learn everything you need to know about NPS Vatsalya, how it works, who’s eligible, and more.

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Contents

What is NPS Vatsalya Scheme?
Who Can Open an NPS Vatsalya Account?
Benefits of the NPS Vatsalya Scheme

What is NPS Vatsalya Scheme?

The NPS Vatsalya Scheme proposed in Budget 2024 is a new pension scheme that facilitates savings for children's futures. With this scheme, parents and guardians can set up an NPS account for their children and make regular monthly or yearly contributions until they turn 18. Once the child reaches adulthood, the account can easily be converted into a standard NPS account.

Who Can Open an NPS Vatsalya Account?

This NPS scheme is open to all parents and guardians, including Indian citizens, NRIs, and OCIs. So, if you're looking to secure your child's future, you can take advantage of this scheme no matter where you're based.

The Central Government will likely offer a way to apply for the NPS Vatsalya Scheme through the official eNPS website. Keep an eye on the site for more details on how to get started.

Benefits of the NPS Vatsalya Scheme

Here are a few benefits of this new initiative.

Long-Term Growth: Since the account is set up while your child is still a minor, it can save up substantially by the time they retire.
Early Savings Habits: It encourages children to develop good habits related to saving money early in life.
Easy Account Conversion: When your child turns 18, their NPS Vatsalya account can easily be converted into a standard NPS account, which they can keep for their entire life to build a solid retirement fund.

Financial Responsibility: It helps instil a sense of financial responsibility and promotes the importance of saving as they transition into adulthood.