Finance Minister Nirmala Sitharaman officially launched the NPS Vatsalya scheme on September 18, 2024, almost two months after announcing it in the Union Budget 2024. The scheme, which is an extension of the existing National Pension Scheme, focuses on children.
This initiative was rolled out across 75 locations nationwide, with over 250 PRANs (permanent retirement account numbers) being allocated to young subscribers.
What is NPS Vatsalya
Vatsalya is a new pension scheme for children in the age group of 0 to 18 years. A parent can deposit a minimum of 1000 per month and a maximum with no limit. This account will be operated by the parents until the child turns 18, after which the account will be in the name of the children. Once the child turns 18, the account can be seamlessly converted into a regular NPS account or a non-NPS scheme.
NPS Vatsalya will allow parents to save for their children’s future by investing in a pension account and ensure long-term wealth with the power of compounding. NPS Vatsalya offers flexible contributions and investment options, allowing parents to make investment of Rs. 1,000 annually in the name of the child, thus making it accessible to families from all economic backgrounds.
This new initiative is designed to start early in securing financial future of children, marking an important step in India’s pension system.
Online platform for NPS Vatsalya
Finance Minister Nirmala Sitharaman
As part of the launch in New Delhi, NPS Vatsalya events were be organised simultaneously at nearly 75 locations throughout the country. Four Districts from Maharashtra Mumbai, Pune, Nanded and Nagpur participated in this national launch event, virtually through video conferencing.
The State Level Bankers Committee organized the launch ceremony of NPS Vatsalya Yojana in Jogeshwari area of Mumbai. On this occasion, PRAN-Permanent Retirement Account Number cards required for this scheme were distributed to the children.
The Finance Minister also launched an online platform for subscribing to NPS Vatsalya, release of scheme brochure, and distribute Permanent Retirement Account Number (PRAN) cards to new minor subscribers. The Scheme will be run under the Pension Fund Regulatory and Development Authority (PFRDA).
To develop savings habit in Children
While launching the scheme, the Finance Minister expressed that NPS Vatsalya will encourage young subscribers to develop a savings habit, and significant wealth can be built up through the effects of compounding. She emphasized that the scheme would provide a respectable life for these children later in their life.
Apart from safeguarding subscribers’ futures, the scheme is designed on the principle of intergenerational equity, which will provide coverage to children as well as older family members.
The launch of NPS Vatsalya is a major step by the Government in the direction of giving India’s future generations a stable and independent financial future.
