Nirmala Sitharaman Launches ‘NPS Vatsalya’ Pension Scheme for Minors

New Delhi: Union Finance Minister Nirmala Sitharaman on Friday officially launched NPS Vatsalya, a pension scheme aimed at minors, as per the announcement made in the July Union Budget 2024. The scheme was rolled out at 75 locations across India, with over 250 Permanent Retirement Account Numbers (PRANs) issued to young subscribers.

NPS Vatsalya allows parents to invest a minimum of ₹1,000 per month without an upper limit, promoting disciplined savings for children’s future, according to a Ministry of Finance statement. The account will be managed by parents until the child turns 18, at which point it will be transferred to the child. Upon reaching adulthood, the account can either be converted into a regular NPS account or another non-NPS scheme.

The initiative focuses on wealth accumulation through compounding, ensuring a secure financial future for the beneficiaries. All minors under 18 are eligible for the scheme, with their guardians managing the account until they become adults.

Sitharaman highlighted that NPS Vatsalya encourages the habit of savings in young subscribers and will help build substantial wealth for a secure future. Banks such as ICICI Bank, Axis Bank, Punjab National Bank and Canara Bank have already begun offering the scheme.

Documents required for NPS Vatsalya include the minor’s Date of Birth proof, KYC of the guardian and the minor’s bank account details, particularly if the guardian is an NRI.