NPS Vatsalya: Now minors can also open NPS account, launched by Finance Minister Nirmala Sitharaman, know everything..
Now minors i.e. children below 18 years can also open an account in the National Pension Scheme or NPS. Yes, the private sector Axis Bank has joined hands with the Pension Fund Regulatory and Development Authority (PFRDA) to launch National Pension Scheme (NPS) Vatsalya. It is a scheme focused on securing the financial future of children below the age of 18 years.
Finance Minister Nirmala Sitharaman had announced this during the Union Budget. The scheme was launched at a program held here today. On this occasion, Sitharaman provided a symbolic Permanent Retirement Account Number (PRAN) to Lamba Karnam Aditri of Hyderabad, who was selected by Axis Bank. It is believed that this initiative will empower families to plan for long-term financial security for their children.
Worry about the future from childhood.
This new program represents a significant advancement in India's pension system, aimed at starting early to protect the financial future of children. The scheme will be managed by the Pension Fund Regulatory and Development Authority (PFRDA).
What is NPS Vatsalya
NPS Vatsalya will allow parents to save for their children's future by investing in a pension account and ensuring long-term wealth with the power of compound interest. NPS Vatsalya offers flexible contribution and investment options, allowing parents to invest Rs 1,000 annually in the name of the child, thus making it accessible to families from all economic backgrounds.
What will happen after 18 years?
This account will be opened in the name of a minor, so a provision has been made to operate it by the guardian. The sole beneficiary of this scheme will be the minor in whose name this account has been opened. On attaining the age of 18 years by the person in whose name this account has been opened, this account can be easily transferred to NPS Tier - I.
The benefit of all investment facilities
All investment facilities can be availed in NPS Vatsalya Yojana also through Auto Choice / Active Choice. By encouraging early investment and providing a structured savings plan, NPS Vatsalya aims to build a strong financial foundation for young individuals. This innovative approach not only ensures that children get the benefits of disciplined savings and compounding over time but also instills a sense of financial responsibility from an early age.
Can withdrawals be made from NPS Vatsalya?
According to the Central Bank of India website: 'Withdrawals up to 25% of the contribution are permitted after a lock-in period of 3 years for education, specified illness and disability, that to a maximum of three times. However, withdrawal is permitted on the child attaining the age of 18 years.
