Union Finance Minister Nirmala Sitharaman introduced the NPS Vatsalya scheme on Tuesday. Managed by the Pension Fund Regulatory and Development Authority (PFRDA), this initiative aims to secure long-term wealth for children. The launch was held across 75 locations in India, with additional locations joining via video conference. ICICI Bank also participated, opening the scheme at its Mumbai service center.
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- NPS Vatsalya allows parents to invest for their child’s retirement from infancy.
- Contributions are invested in market-linked securities like equities and bonds for potential higher returns.
- Parents can start with an annual investment of Rs 1,000; no upper limit.
- Accounts can be opened through major banks, India Post, and online platforms like e-NPS.
- The scheme offers various investment options including moderate, aggressive, and conservative choices.
- Withdrawals are allowed up to 25% of the corpus for specific needs like education and medical treatment after three years.
- At age 18, subscribers can withdraw up to Rs 2.5 lakh or 20% of the excess amount; remaining funds can be used for annuity or converted to a regular NPS account.
- In case of death, the entire corpus is transferred to the nominee or legal guardian.
- ICICI Bank is supporting the launch with dedicated accounts and PRAN cards for children.
