NPS Vatsalya
NPS Vatsalya
A unique initiative introduced in Union Budget 2024, NPS Vatsalya allows parents and guardians (including NRIs and OCIs) to open a National Pension System (NPS) account for their minor children. It promotes early saving habits, helping create a strong retirement corpus over time.
1
Why Choose NPS Vatsalya?
- Early Start: More time for compounding may lead to better returns
- Market-Linked Growth: Potentially better than traditional plans
- Auto-Upgrade at 18: Seamlessly becomes a regular NPS Tier I account
2
Who Can Invest?
- Contribution can be made by parent, guardian, or subscriber
- Relatives and friends can also gift money to the NPS Vatsalya account
3
Contributions to the Account
| Type | Minimum Amount | Maximum Limit |
|---|---|---|
| Account Opening | ₹250 | No limit |
| Annual Contribution | ₹250 | No limit |
4
NPS Vatsalya investment norms
| Asset Type | Limit |
|---|---|
| Government Securities | 15 – 20% |
| Debt Instruments | 10 – 30% |
| Short-term Debt (Money Market) | Up to 10% |
| Equity Investments | 50 – 75% |
*The money market limit will apply once the scheme corpus exceeds ₹5 crore
Required Documents
5
What You Need to Apply
| Child’s Date of Birth Proof | Birth Certificate / School Leaving Certificate / (Matriculation) Certificate / PAN / Passport |
| Parent / Guardian KYC | Aadhaar / Driving License / Passport / Voter ID / NREGA Job Card / NPR Document |
| Parent / Guardian PAN | PAN Card or Form 60 (if PAN not available) |
| Bank Account (For NRI/OCI Guardian) | Minor's NRE or NRO Bank Account (Single or Joint) |
6
NPS Vatsalya exit norms
- After 18, subscriber can continue for up to 3 years or shift
to regular NPS or any other applicable NPS model - Fresh KYC and nominee details are required
- No withdrawal allowed until KYC is done
(investment keeps earning returns)
After KYC, subscriber can:
- Shift to NPS or any other applicable NPS model
- Withdraw up to 80% lump sum (rest in annuity)
- Withdraw full amount if corpus is below ₹8 lakh
- If no choice is made by age 21, account shifts to high-risk Multiple Scheme Framework (MSF) option automatically
Partial Withdrawal
- Partial withdrawal allowed for education, serious illness,
or disability (75% or more) of the minor subscriber - Allowed after 3 years of account opening
- Up to 25% of contributions can be withdrawn
- Maximum 2 withdrawals till age 18
- After 18 and KYC, 2 more withdrawals allowed till age 21
7
Death of subscriber and Guardian
- If subscriber dies, full amount is paid to guardian, nominee, or legal heir
- Receiver can transfer money to their own NPS account
- If guardian dies, a new guardian must be registered with KYC
- If both parents die, legal guardian can continue the account
Get started with just a click!
How to Open an NPS Vatsalya Account
