NPS Vatsalya Scheme: Start Retirement Planning for Your Child with Just ₹1,000 – Here’s How
In a move to promote early financial planning, the Government of India launched the NPS Vatsalya Scheme, a special retirement savings initiative designed exclusively for minors. With just ₹1,000 as the minimum annual contribution, parents can begin building a secure financial future for their children — even before they enter the workforce.
Let’s explore what the NPS Vatsalya Scheme is, how to enroll, what benefits it offers, and why it’s gaining attention among parents across the country.
What Is NPS Vatsalya Scheme?
Introduced in July 2024, the NPS Vatsalya Scheme allows parents or legal guardians to open a National Pension System (NPS) account in their child’s name. It is specifically designed for children aged 0 to 18 years, aiming to help them build a retirement corpus through long-term investment.
Each account is linked with a Permanent Retirement Account Number (PRAN), and the funds are professionally managed and invested across government bonds, equities, and fixed-income instruments, leveraging the power of compounding over time.
How Much Can You Invest?
Parents can start with a minimum annual contribution of ₹1,000, and there is no upper limit on investment. The returns typically range between 9.15% and 10% per annum, depending on the asset allocation and market performance.
Example:
If a parent invests ₹15,000 every month starting when the child is 3 years old, and continues for 15 years, by the time the child turns 18, the corpus can grow to approximately ₹60 lakhs, assuming consistent returns.
Step-by-Step Guide to Open an NPS Vatsalya Account Online
You can easily open an account through the eNPS portal by following these steps:
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Visit the official eNPS website.
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Click on “Register Now” under the Minors section.
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Enter the guardian’s PAN, date of birth, mobile number, and email.
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Verify using OTP.
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Upload KYC documents and provide child and guardian details.
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Make the initial contribution of ₹1,000.
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Complete eSign or dual OTP process for final submission.
Once the PRAN is generated, the account becomes active.
Required Documents
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Parent/Guardian KYC: Aadhaar, PAN, or Voter ID
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Child’s Age Proof: Birth certificate, school certificate, or passport
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For NRI/OCI children: Overseas address and bank details
Key Benefits of NPS Vatsalya Scheme
✅ Early Financial Discipline: Encourages savings habits in children from a young age.
✅ Long-Term Wealth Creation: Ideal for funding education, marriage, or even home buying in the future.
✅ Attractive Returns: Market-linked growth with professional fund management.
✅ Tax Benefits: Contributions qualify for deduction under Section 80C, and the maturity amount is tax-free under Section 10(10D).
✅ Emergency Withdrawals: Up to 25% of the corpus can be withdrawn for urgent needs like education or medical expenses.
✅ Financial Security: In case of the parent’s demise or financial hardship, the accumulated fund can support the child.
More Than Just Savings – A Safety Net
Beyond wealth creation, NPS Vatsalya also acts as a protective financial cushion. If parents are unable to continue contributions due to unforeseen circumstances, the funds already saved can offer vital support for the child’s needs. This built-in resilience makes the scheme even more valuable in today’s uncertain economic climate.
Final Words
The NPS Vatsalya Scheme is not just another investment option — it’s a smart and strategic tool to secure your child’s financial independence. With minimal entry barriers and long-term growth potential, it serves as a bridge between responsible parenting and future-ready planning.
If you’ve been wondering when to start thinking about your child’s retirement savings, the answer might just be: right now.
