NPS Vatsalya: Finance Minister set to launch scheme for minors at 2:30 pm today; here is what we know so far

Finance Minister Nirmala Sitharaman is set to launch on Wednesday what will be a special National Pension System (NPS) that will enable parents or guardians to make contributions towards on behalf of their minor children. The NPS Vatsalya plan will be operated by the Pension Fund Regulatory and Development Authority (PFRDA), the country's pension fund regulator.

The finance minister will also launch a platform that will enable seamless subscription to the NPS Vatsalya scheme.

The scheme is set to benefit families of all financial backgrounds. 

Here's what we know about the scheme so far:

At what time will the NPS Vatsalya scheme be launched?

The scheme will be launched at 2:30 pm on Wednesday, September 18. 

Who will benefit? 

The scheme will be in favour of minor children enabling their parents or guardians to build a corpus for their financial needs starting much earlier than a normal NPS account. This will enable the funds to grow at a much higher rate and benefit the child till they reach adulthood. 

What will happen to the account upon maturity?

Upon reaching the age of 18, the beneficiary will have the option of converting the NPS Vatsalya account into a regular NPS account. 

PRAN 

At the time of opening the account, the minor subscribers will be issued permanent retirement account numbers (PRAN) among other details.

Investment Options NPS Vatsalya 

The NPS Vatsalya scheme will come with options like flexible contributions and choice of investment.

Lock-in Period

NPS Vatsalya will have a lock-in period—the period during which it cannot be surrendered—of three years.

Premature Withdrawal

After serving the minimum required lock-in period of three years, depositors will become eligible for the option of up to three withdrawals, amounting up to 25 per cent of the corpus. 

Minimum Investment 

The scheme will enable parents or guardians to invest amounts as small as Rs 1,000 per year in favour of the minor subscribers.