NPS Vatsalya Scheme Guidelines 2025
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Background - NPS Vatsalya
NPS Vatsalya was launched by the Hon'ble Finance Minister in the Union Budget of FY 2024-25 as a revolutionary plan for contribution by parents and guardians for minors. This scheme marks a significant advancement in financial planning and sets a new standard for prudent financial management from a young age.
✨ Key Launch Details
- Launched on 18th September 2024 by Hon'ble FM Smt. Nirmala Sitharaman
- Aligned with the vision of 'Vikasit Bharat 2047'
- Regulated under Regulation 4A of PFRDA (Exit and Withdrawals) Regulations, 2015
- Approved in PFRDA 120th Board Meeting
Union Budget Announcement
"NPS-Vatsalya, a plan for contribution by parents and guardians for minors will be started. On attaining the age of majority, the plan can be converted seamlessly into a normal NPS account."
— Union Budget FY 2024-25
Scheme Objectives
The NPS Vatsalya scheme is specifically designed to nurture financial literacy and long-term wealth creation for minors:
Early Savings Culture
Nurture the culture of saving from an early age and introduce financial literacy
Financial Planning
Introduce minors to financial literacy and prudent financial management practices
Long-term Security
Strengthen the concept of long-term financial security and wealth creation
Youth Empowerment
Secure the future of young subscribers and create a pensioned society
National Vision
Contribute to India's vision of 'Viksit Bharat@2047'
Contingency Support
Provide partial withdrawals for unforeseen situations until age 18
Eligibility Criteria
The NPS Vatsalya scheme is designed to be inclusive and accessible to all eligible minors:
Who Can Join?
- All Indian citizens aged below 18 years
- Non-Resident Indians (NRIs) under 18 years
- Overseas Citizens of India (OCIs) under 18 years
Guardian Requirements
- Account opened and managed by parents or legal guardians
- Guardian can be either parent or court-appointed legal guardian
- Guardian acts as the point-of-contact for account management
- Minor is the sole beneficiary of all contributions and returns
Required Documents to Open Account
Documents for the Minor (Subscriber)
Proof of date of birth through any of the following:
- Birth Certificate
- School Leaving Certificate
- Matriculation Certificate
- Permanent Account Number (PAN)
- Passport
Documents for the Guardian
- Proof of Identity & Address: Aadhaar, Driving License, Passport, Voter ID, NREGA Job Card, NPR documents
- PAN/Form 60: PAN of guardian or Form 60 declaration as per Rule 114B
- For Legal Guardian: Copy of court order appointing the legal guardian
Special Requirements for NRI/OCI
- Minor's sole or joint NRE/NRO bank account (mandatory)
- Complete KYC documentation
Contributions & Investment Options
Minimum Contribution
💵 Contribution Amount
Minimum Opening & Annual Contribution: ₹250/-
Note: To obtain maximum compounding effect for long-term savings, contribute as much as possible depending on capacity to pay.
Who Can Contribute?
- Parents/Guardians - Primary contributors
- Relatives and Friends - Can gift contributions to the account
- Extended Family - Can support the child's financial future
Contribution Methods
| Contribution Mode | Description |
|---|---|
| Physical Mode | Visit any registered Point of Presence (PoP) with cheque/cash and NPS slip |
| Online via PoP | Online facility provided by registered Point of Presence (Banks, India Post, etc.) |
| eNPS Platform | Digital contribution through NPS Trust's eNPS platform |
| Other Electronic Modes | Any other mode approved by PFRDA from time to time |
Choices at Account Opening
- Central Recordkeeping Agency (CRA): Choose from registered CRAs
- Pension Fund (PF): Select from registered Pension Funds with PFRDA
Investment Asset Allocation
| Asset Class | Indicative Allocation |
|---|---|
| Government Securities & Related Investments | 15-20% |
| Debt Instruments & Related Investments | 10-30% |
| Short-term Debt Instruments (Money Market)* | Up to 10% |
| Equity & Related Investments | 50-75% |
*Money market limit applicable once scheme corpus exceeds ₹5 crore
Withdrawal & Exit Rules
Partial Withdrawal (Before Age 18)
Partial withdrawal is permitted to address specific contingencies:
Eligible Reasons for Partial Withdrawal
- Education: For education expenses of the minor subscriber
- Medical Treatment: For specified illnesses of the minor
- Disability: If disability exceeds 75% of the minor subscriber
- ✓ Minimum 3 years in the scheme before withdrawal
- ✓ Maximum 25% of contributions (excluding returns)
- ✓ Maximum 2 withdrawals until age 18
- ✓ Maximum 2 additional withdrawals between age 18-21
Options Upon Attaining Majority (Age 18)
When the subscriber turns 18, they have several options:
Option 1: Continue in NPS
- Continue for up to 3 years from age 18
- Complete fresh KYC and provide nominee details
- Account seamlessly shifted to NPS All Citizen Model
Option 2: Partial Withdrawal
- Withdraw up to 80% of accumulated corpus as lump sum
- Remaining balance must be reinvested in annuity plan
Option 3: Full Withdrawal
- Available if total corpus is less than ₹8 lakh
- Withdraw entire accumulated amount as lump sum
Option 4: Auto-Migration (If No Choice)
If no option is exercised between ages 18-21, the account is automatically shifted to the high-risk variant (higher equity exposure) under the Multiple Schemes Framework (MSF). Standard NPS withdrawal rules will then apply.
Death of Subscriber
- Entire accumulated pension wealth becomes payable to guardian/nominee/legal heir
- Recipient has the option to transfer proceeds to their individual NPS account
Change of Guardian
- If guardian predeceases, another guardian must be registered with KYC documents
- If both parents pass away, legally appointed guardian may continue the account
- Subscriber has exit options upon turning 18
Important Points & Key Features
Account Management
👤 Account Holder & Beneficiary
- Guardian opens and manages account during minor's childhood
- Minor is the sole beneficiary of all funds
- All contributions, returns, and benefits belong exclusively to the minor
- Management rights automatically transfer to subscriber at age 18
Unique Identification
- A unique Permanent Retirement Account Number (PRAN) issued by CRA
- PRAN identifies and tracks the account throughout life
Charges and Fees
- Same charges as NPS All Citizen Model
- Applicable to:
- Point of Presence (PoP)
- Central Recordkeeping Agency (CRA)
- Pension Fund Management Fees
- NPS Trust Charges
- Custodian Charges
Account Access & Monitoring
Digital Access
Login credentials provided by CRA for online access through website/mobile app
Statements
Periodic statements via email and annual physical statement by mail
Physical Access
Visit registered Point of Presence (PoP) for account details
Performance Tracking
Monitor investments through Statement of Transactions (SoT) which shows:
- Investment performance and returns
- Contribution history
- Fund allocation
- Accumulated wealth
Opening the Account
NPS Vatsalya account can be opened through:
- Physical Mode: Visit registered PoPs (Banks, India Post, Pension Funds)
- Online: Through Point of Presence online facilities
- eNPS Platform: Digital account opening via NPS Trust
- Other Approved Modes: Any electronic mode approved by PFRDA
Grievance Resolution
- PFRDA has notified PFRDA (Redressal of Subscriber Grievance) Regulations, 2015
- Online platform: Central Grievance Management System (CGMS)
- Complaints resolved within 30 days maximum
- Escalation option available for further resolution
Community Incentive Program
🌟 Special Promotion Initiative
To promote NPS Vatsalya in rural and semi-urban areas:
- Incentive up to ₹100 per account for enrollment facilitators
- Eligible facilitators: Anganwadi workers, ASHA workers, Bank Sakhis, community workers
- Routed through CSC eGovernance Ltd and other registered PoPs
- Incentive framework reviewed annually
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