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"NPS Vatsalya Scheme: Union Finance Minister Nirmala Sitharaman on September 19 launched the National Pension System Vatsalya (NPS Vatsalya) scheme, &lsquo;a pension scheme for minors&rsquo;. The NPS Vatsalya was announced by the government in the Union Budget 2024-25.\r\rSitharaman also released a brochure, detailing the features of the NPS Vatsalya scheme and also distributed permanent retirement account number (PRAN) cards to minor subscribers who had come from different parts of the country.\r\rWhat is NPS Vatsalya?\r\r&nbsp;The NPS Vatsalya Yojana is a pension scheme designed for children, allowing parents to open pension accounts on behalf of their children and invest for their future. Contributions to this scheme benefit from compound interest. An account can be opened with a minimum annual contribution of Rs 1000, with no maximum limit on investment.\r\rNPS Vatsalya will allow parents to save for their children&rsquo;s future by investing in a pension account and ensure long-term wealth with the power of compounding. NPS Vatsalya offers flexible contributions and investment options, allowing parents to make investment of Rs 1,000 annually in the name of the child, thus making it accessible to families from all economic backgrounds.\r\rThis new initiative is designed to start early in securing the financial future of children, marking an important step in India&rsquo;s pension system. The Scheme will be run under the Pension Fund Regulatory and Development Authority (PFRDA).\r\rEligibility for NPS Vatsalya\r\r\r\tAll minor citizens (age below 18 years).\r\tAccount can be opened in the name of minor and operated by parent or guardian. Minor will be the beneficiary.\r\tScheme can be opened through various Points of presence regulated by PFRDA such as major banks, India Post, Pension Funds and Online platform (e-NPS).\r\tSubscriber to make a minimum contribution of Rs 1000/- per annum. There is no limit on the maximum contribution.\r\tPFRDA will provide multiple investment choices to subscribers. Subscribers can take exposure in government securities, corporate debt, and equity in different proportions based on risk appetite and desired returns.\r\tOn attaining the age of majority, the plan can be converted seamlessly into a normal NPS account.&nbsp;\r\r\rRules to withdraw money from NPS Vatsalya\r\r\r\tThe NPS Vatsalya Yojana has a lock-in period of 3 years. After this period, if the child is under 18, up to 25 per cent of the total contributions can be withdrawn for purposes such as education, illness, or disability, with a maximum of three withdrawals allowed.\r\tOnce the child turns 18, their NPS Vatsalya account will be transferred to a regular NPS account. The child may choose to continue the NPS account, but must complete KYC within three months of turning 18. After this age, at least 80 per cent of the total amount in the account must be allocated to an annuity plan, with the remaining 20% available for lump sum withdrawal. If the total amount in the account is Rs 2.5 lakh or less after 18 years, the entire amount can be withdrawn in a lump sum.\r\r\rIn case of death\r\rIf the child account holder dies, all the money deposited in the account in his/her name will be returned to the parent (nominee). If either of the parents dies, another guardian will be registered through a fresh KYC. If both the parents die, any legal guardian can continue the account without making any contribution until the child turns 18 years old.\r\rWhere to open an account\r\rUnder the NPS Vatsalya scheme for a child, an account can be opened through a bank, post office, online platform or e-NPS. Apart from this, you can also open an NPS Vatsalya account for your child by visiting this website https://app.camsnps.com/CRA/auth/enps/register?source=eNPS\r\rOptions available for investment\r\rParents can choose any pension fund for their child, which is registered with PFRDA. There are many options available for investment under this scheme:\r\r\r\tActive Choice: In this option, parents can invest up to 75% of funds in equity, up to 100% in corporate debt, up to 100% in government bonds or up to 5% in other assets.\r\tAuto Choice: In this option, parents can invest the amount to be invested in different life cycles i.e. LC as per their wish. In this, parents can choose LC-75 (Aggressive), in which 75% of the amount will go to equity. In LC-50 (Moderate), 50% and in LC-25 (Conservative), 25% of the amount will go to equity.\r\tDefault Choice: In this option, 50% of the amount to be invested will go to equity.\r\r\rAlso Read:&nbsp;US Fed cuts interest rates by 50 basis points, first reduction since 2020\r\rAlso Read:&nbsp;Refund cap for Sahara Group depositors increased to Rs 50,000 from Rs 10,000: Govt\r"
<https://www.indiatvnews.com/business/news/nps-vatsalya-scheme-how-to-invest-and-withdraw-money-know-benefits-eligibility-criteria-and-more-latest-updates-2024-09-19-952930>