What is NPS Vatsalya? It is a special pension scheme focused on minors.
The scheme was announced in the July 23 Budget, the first Union Budget under the Narendra Modi 3.0 government.
Finance Minister Nirmala Sitharaman will launch the NPS Vatsalya scheme on September 18.
Under the contributory pension scheme, parents and guardians will be able to invest funds in favour of minors, thereby building a corpus on their behalf.
The bearer will be able to convert the Vatsalya account into a normal NPS account upon attaining adulthood.
The main purpose of the NPS Vatsalya scheme is to promote financial planning and savings habits among children.
Parents and guardians can open the NPS Vatsalya account for their children and start saving on their behalf at an early stage.
The corpus continues to grow even after the main holder reaches the age of 18 years.
The NPS Vatsalya scheme helps parents and guardians build a significant corpus for a child's future needs.