Everything to know about NPS Vatsalya 

Everything to know about NPS Vatsalya 

Sandeep Singh

Sep 19,2024

Announced in July 2024, NPS Vatsalya is a special NPS scheme that enables parents and guardians to build a long-term corpus for their minor children. 

When was NPS Vatsalya announced?

The special NPS scheme for minors was announced on July 23. 

How does it work?

The scheme allows parents/guardians to build a retirement corpus for their children. 

When does the account mature?

An NPS Vatsalya accounts gets converted into a normal NPS account when the minor attains the age of 18. 

What is the minimum investment required for NPS Vatsalya?

The scheme allows a minimum investment of Rs 1,000 per year. 

Is there a lock-in period?

Yes, an NPS Vatsalya account comes with a lock-in period of 3 years. 

Can you withdraw funds during lock-in period?

No.

Is premature withdrawal allowed?

Yes. The premature withdrawal option is available up to 25% of the corpus after completing 3 years from the opening of the account. 

NPS Vatsalya provides a host of benefits, ranging from long-term wealth creation through market-linked returns to flexibility in terms of contributions and choice of investment, ensuring a secure financial future for children. 

- Moderate Lifecycle Fund: 50% investment in equities (default) - Auto Choice: Allocate 75%, 50%, or 25% to equities - Active Choice: Distribute funds across asset classes such as equities, corporate debt, G-Secs 

Investment options available under NPS Vatsalya 

You need the following documents to set up an NPS Vatsalya account through Aadhaar: Date of birth proof of minor Parent/guardian signature Scanned copies of passport, foreign address proof, and bank proof (for NRI/OCI subscribers)

Documents required to open account

One can open an NPS Vatsalya account at banks, post offices, and a dedicated, newly-launched portal. 

Where to open account?

Making large cash deposits in your bank account? Read this