NPS Vatsalya Yojana

About NPS Vatsalya Yojana

Aim: A new pension scheme for minors under the National Pension System (NPS) aimed at promoting early saving habits among children.
Objective: To create a pensioned society and empowerment of children.
Nodal Ministry: Ministry of Finance
Regulated by: Pension Fund Regulatory Authority of India (PFRDA)
Eligibility:
- Children aged 0 to 18 years. The minor must be a citizen of India.
- The guardian can be a Non-Resident Indian (NRI) or Overseas Citizen of India (OCI). A bank account (NRE or NRO) is mandatory when the guardian is an NRI or OCI.
A unique Permanent Retirement Account Number is issued in minor’s name.
Contribution: Parents can contribute a minimum of ₹1,000 per month, with no upper limit on contributions.
Once the child reaches 18, the account can be converted into a regular NPS or non-NPS account.

Lock-in Period: 3-year lock-in from account opening.
Partial Withdrawals: After lock-in, parents can withdraw up to 25% for specific purposes (education, medical treatment, disability) with a max of three withdrawals.
Withdrawal at 18: Converts to a regular NPS account. If the corpus exceeds ₹2.5 lakh, 80% must be used to purchase an annuity; 20% can be withdrawn. If ≤ ₹2.5 lakh, the full amount can be withdrawn.
In Case of Death: Full corpus returned to the guardian if the child dies. A new guardian can be registered if a parent dies; legal guardianship applies if both parents die.