Sitharaman launches NPS Vatsalya, scheme facilitates saving for child from very young age

The minister had announced the scheme in this year's union budget. It is a plan for contribution by parents and guardians for minors.

NPS Vatsalya offers flexible contribution and investment options, allowing parents to make investments starting from Rs. 1,000 annually in the child's name, making it accessible to families from all economic backgrounds.

The scheme will be managed under the Pension Fund Regulatory and Development Authority (PFRDA). All minor citizens (age till 18 years) are eligible.

Guardians and parents can open an NPS Vatsalya account for children with a minimum of Rs 1000 annually.

Parents can open the account through registered points of presence (banks, post offices, pension funds, etc.) either online or in person. The list is available on the PFRDA website. It can also be done online through NPS Trust's eNPS platform.

As per PFRDA, after the age of 18, the account will automatically become a regular NPS Tier I account.

The Finance Minister during the launch of the scheme said that the NPS Vatsalya will bring a habit of saving for parents who can invest money for their children's future.

"You can invest in the name of your children up to the age of 18 years. You can do it through any major bank, post office, pension funds' office or even through the e-NPS portal. My appeal to all parents is when you attend a birthday party of a child, you can take cakes or other gifts, but money to invest in NPS Vatsalya can also be a form of gift. It will be a lifelong contribution to the child's future."

"So birthdays or any other happy occasions in the family, if our gifts are going to be the Vatsalya, you are not just giving the birthday gift on that day or the happy day's gift on that day; it will be a lifelong contribution for the child's future. So I invite all the parents and all elders to look at children in the family, children in the neighbourhood, children of the people who are with you," she said.

She also referred to the union cabinet recently approving the Unified Pension Scheme (UPS) for central government employees which will be effective from April 1, 2025.

"It has the best elements of the Old Pension Scheme (OPS) as well as the New Pension Scheme (NPS), and it provides an assured pension after retirement. Under UPS, Government employees will receive a guaranteed pension amounting to 50 per cent of their average basic pay drawn over the last 12 months before retirement. Additionally, the UPS scheme includes inflation indexation based on the All India Consumer Price Index for Industrial Workers (AICPI-IW)," she said.

"State governments also have the option to adopt the Unified Pension Scheme. UPS balances the interests of government employees as well as taxpayers by not overburdening future generations with heavy pension bills," she added .

Finance Ministry officials said that launch of NPS Vatsalya underscores the Centre's dedication to promote long-term financial planning and security for all. (ANI)