NPS Account for Minors: Know NPS Vatsalya's Features, Eligibility, How To Open Account

NPS Vatsalya is a specialised variant of the National Pension System (NPS) tailored for minor children. Parents or legal guardians can open and contribute to this account until the child attains the age of 18. Once the child reaches adulthood, the account can seamlessly transition into a standard NPS account.

Salient Features of NPS Vatsalya

Early Start: Begin saving for your kid’s retirement as early as possible.

Long-Term Growth: Benefit from the power of compounding over a long investment horizon.

Tax Benefits: Enjoy potential tax deductions under Section 80C of the Income Tax Act.

Flexibility: Choose from various investment options to align with your risk appetite.

Government Backing: The scheme is backed by the Government of India, ensuring safety and credibility.

Eligibility Criteria

To open an NPS Vatsalya account, you must fulfill the following conditions:

• You must be a parent or legal guardian of the minor child.
• The child must be below 18 years of age.
• You can be an Indian citizen, Non-Resident Indian (NRI), or Overseas Citizen of India (OCI).

How to Open an NPS Vatsalya Account

The process of opening an NPS Vatsalya account is relatively straightforward:

Choose a Pension Fund Manager (PFM): Select a PFM from the list of authorised ones.

Gather Required Documents: Prepare the necessary documents, including the child’s birth certificate, your identity proof, and address proof.

Complete the Application Form: Fill out the NPS Vatsalya application form with accurate details.

Make Initial Contribution: Deposit the minimum required amount to initiate the account.

Account Activation: Once the formalities are complete, your NPS Vatsalya account will be activated.

Investment Options

Similar to the standard NPS, Vatsalya offers a mix of investment options:

Equity: Invest in stocks for higher potential returns but with associated risks.

Corporate Debt: Opt for investments in corporate bonds for moderate returns and lower risk.

Government Securities: Choose government bonds for stable returns and minimal risk.

Benefits of NPS Vatsalya

Secure Retirement: Build a substantial corpus for your child’s retirement.

Tax Savings: Avail tax benefits under Section 80C of the Income Tax Act.

Financial Discipline: Cultivate a habit of saving for the future from a young age.

Flexibility: Choose investment options based on your risk tolerance.