NPS Vatsalya Scheme
Start with as low as ₹ 1,000
Flexible contributions
Compounded growth
Instil the savings habit
BEST FOR
Key Features of the NPS Vatsalya Scheme
-
Long-term financial security
-
Affordable yearly contributions
-
Builds financial responsibility
-
Protection against uncertainty
-
Flexible contribution options
-
Power of compound interest.
How to Open an NPS Vatsalya Account
-
Keep your (parent’s / guardian’s) Aadhaar Card, PAN Card and the minor’s birth certificate ready.
-
Register online at the eNPS website or visit a Point of Presence (POP). ICICI Bank is a POP for NPS.
-
Fill the guardian’s and minor’s details in the NPS Vatsalya registration form.
-
Upload the scanned documents online / submit their copies at the POP.
-
NSDL / PFRDA verifies the details.
-
Unique PRAN (Permanent Retirement Account Number) is issued.
Things you’ll need to apply
Eligibility Criteria to Open an NPS Vatsalya Account
- Age: The scheme is available only for minors aged under 18 years.
- Residency: It is open to Indian citizens, NRIs (Non-Resident Indians) and OCIs (Overseas Citizens of India).
- Guardian’s Role: The parent or legal guardian must open and operate the NPS Vatsalya Account on behalf of the child until the child turns 18.
- New KYC at 18 years: Once the child completes the age of 18 years, the Account needs a fresh KYC verification and is converted into a regular NPS Tier-1 Account
Documents Required for Opening an NPS Vatsalya Account
- KYC documents of the parent / guardian - Aadhaar Card and copy of cancelled cheque
- Birth certificate of the minor (child)
- School leaving certificate / Matriculation certificate of the minor (child) issued by the Higher Secondary Board of respective states, ICSE, CBSE, etc.
- Passport of the minor (child)
- PAN Card of the parent / guardian
- Latest passport-sized photographs of both the minor (child) and the parent / guardian
FAQs About NPS Vatsalya
Is it good to invest in the NPS Vatsalya Scheme?
NPS Vatsalya is a smart way to start building wealth for your children early in their life. This scheme helps create a financial cushion for your children’s education, wedding and any other important life stage-based expense.
How is the interest rate of the NPS Vatsalya scheme calculated?
NPS Vatsalya does not earn interest at a fixed interest rate. The contribution is invested in a mix of equities, government securities and corporate bonds. The returns are market-linked, which means there are no fixed returns; however, based on past trends, you can expect better growth as compared to traditional fixed-income instruments.
Can I make withdrawals from an NPS Vatsalya Account?
Withdrawals from an NPS Vatsalya Account are subject to specific rules, as given below:
Partial Withdrawal: Allowed only after 3 years and only for specified reasons like illness, education or disability. In such cases, up to 25% of the contribution can be withdrawn, a maximum of 3 times.
On Turning 18: When the minor completes 18 years of age, their NPS Vatsalya Account gets converted into a regular NPS Tier-1 Account. A 3-year lock-in period is then applied, with the same 25% self-contribution withdrawal criteria as in a standard NPS Account.
Premature Closure: Can be done only when the minor completes 18 years of age and then the normal NPS Account closure criteria apply, which are:
1. If the corpus is less than ₹ 2.5 lakh, the full amount can be withdrawn tax-free as a lump sum
2. If the corpus exceeds ₹ 2.5 lakh, then 20% can be withdrawn tax-free as a lump sum, while the remaining 80% must be used to buy an annuity.
In Case of Demise of the Minor: The entire accumulated amount is returned to the parent or guardian.
Blogs
National Pension System (NPS) on Internet Banking
National Pension System (NPS) on iMobile