Union Minister of Finance Nirmala Sitharaman has urged parents to reconsider conventional birthday presents and instead opt for the NPS Vatsalya scheme. During the introduction of NPS Vatsalya on September 18, 2024, she remarked, “If our gifts are going to be Vatsalya, you’ll not just be giving a birthday gift for that day, but it will be a lifelong contribution to the child’s future.”

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Launch Of NPS Vatsalya

The NPS Vatsalya scheme, introduced as part of the Union Budget 2024-25, was officially launched on September 18, 2024. The inauguration event included the introduction of an online platform for subscribing to the plan, the publication of a detailed booklet, and the issuing of Permanent Retirement Account Number (PRAN) cards to new minor subscribers.

Events were hosted at 75 places across India, with other regions participating by video conference.

What Is NPS Vatsalya?

NPS Vatsalya aims to provide financial stability to children from an early age. It enables parents, guardians and well-wishers to contribute to a pension account in the child’s name, thus providing long-term financial security.

Even non-resident Indians (NRIs) and overseas citizens of India (OCI) cardholders can contribute to the scheme for their minor children through their non-resident external (NRE) or non-resident ordinary (NRO) accounts. When the child reaches the age of 18, the account is converted to a conventional National Pension System (NPS) account.

Benefits Of NPS Vatsalya

The scheme offers several key benefits.

1] Long-Term Savings: Early investment in NPS Vatsalya enables parents to take advantage of the benefit of compounding to secure their child’s financial future.

2] Flexible Contributions: Parents have to make a minimum yearly investment of Rs 1,000, which makes the scheme accessible to families from all income levels.

3] Simple Registration: One can participate in the scheme by using Aadhaar, Digilocker and other technologies. It is also open to NRIs and OCI cardholders.

Documents Needed To Start Investing In NPS Vatsalya

To open an NPS Vatsalya account, you will need the following documents.

1] Parents’ KYC Documents: This is required for establishing the identity and address. Acceptable documents include Aadhaar, driver’s license, passport, and voter ID, according to the Pension Fund Regulatory Development Authority (PFRDA) website.

2] PAN of Parents/Guardians: Parents or guardians will also have to provide their Permanent Account Number (PAN) to open an NPS Vatsalya account for their child.

3] Proof of Child’s Date of Birth: This can be a birth certificate, PAN, or a school leaving certificate.

4] NRE/NRO Account Details (for NRIs/OCIs): Details of the child’s NRE or NRO would be required if the parents or guardians are NRIs or OCIs.