NPS Vatsalya released: Finance minister Nirmala Sitharaman Last Tuesday, NPS Vatsalya, the scheme that allows parents to invest in a pension account for their children’s future, was launched. This new initiative allows parents to start saving for their children’s retirement at an early stage. Parents can open an NPS Vatsalya account online or at their local bank or post office. The initial deposit required to open the account is Rs 1,000, and then an annual contribution of Rs 1,000 is needed. The detailed guidelines for withdrawing funds from these accounts are still under development.
Benefits of the plan are highlighted
During the launch, Sitharaman highlighted the benefits of the scheme, noting that the NPS has consistently delivered competitive returns and provides a reliable way for people to save for future income. NPS Vatsalya is an extension of the existing NPS tailored for children. Over the past decade, the NPS has attracted 1.86 million subscribers, with assets totalling Rs 13 lakh crore. Children below the age of 18 can open an NPS Vatsalya account, which will automatically convert to a regular NPS account on reaching the age of 18. The pension will be available only after the account holder turns 60 years of age.
NPS Performance Breakdown
Sitharaman said NPS investments have generated returns of 14 per cent on equity, 9.1 per cent on corporate debt and 8.8 per cent on government securities. The NPS Vatsalya scheme was announced in FY25. Budget presented in July. Several banks, including ICICI Bank and Axis Bank ICICI Bank is collaborating with PFRDA to implement the scheme. ICICI Bank kicked off the scheme in Mumbai by registering the first set of accounts for children. Financial Services Secretary Nagaraju Maddirala said the government is open to feedback and will refine the scheme based on subscribers’ opinions. “Ever since we announced the PM Vatsalya scheme, we have received several suggestions for improvement. We will consider these concerns as we move forward with the implementation,” Maddirala said.(With PTI inputs)
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