NPS Vatsalya Yojana: If you are doing financial planning for your child, then the government’s NPS Vatsalya Yojana is very beneficial. You can open this account for your child with a minimum contribution of just ₹ 1000 per year. Know what are the benefits.
NPS Vatsalya Yojana: If you also want to do financial planning for your children, then the government’s NPS Vatsalya Yojana is also beneficial for that. This scheme not only inculcates the habit of saving in children from a young age, but also helps parents save tax. Recently, the central government has informed in Parliament that people’s trust in this scheme is increasing rapidly. Minister of State for Finance Pankaj Chaudhary told the Lok Sabha that under this scheme, which started in September last year, 1.30 lakh minor customers have been registered till August 3 this year.
What is this NPS Vatsalya Yojana?
In simple words, this is a government pension and investment scheme for children below 18 years of age. Its main objective is to make children financially aware from an early age and create a large fund for their future. This scheme works under the rules of the Pension Fund Regulatory and Development Authority (PFRDA), so that your money remains completely safe.
5 biggest features of the scheme
Start with a small investment: You can open this account for your child with a minimum contribution of just ₹1000 per year. There is no maximum contribution limit.
Child turns 18: As soon as your child turns 18, this account is easily converted into a regular NPS account and the child gets the right to operate it.
Tax benefits to parents: This is one of the most attractive benefits. Under the old tax regime, parents can avail additional tax deduction of up to ₹50,000 under Section 80CCD (1B) of the Income Tax Act on investments made in this scheme. This benefit is in addition to your limit of ₹1.5 lakh.
Great benefit of compounding: Since this is a long-term scheme, it gives tremendous benefit of compounding on your investment, due to which even small savings become a big amount in the future.
Availability all over India: This is an all-India scheme, which any citizen of the country can avail for their children.
How can small savings become a fund of lakhs?
Let us understand through a table how big your child can grow after 18 years if you invest a small amount every month for him/her. (Based on an estimated 10% annual return)
| Monthly Investment | Annual Investment | Total investment in 18 years | Estimated Funds after 18 Years |
| ₹1,000 | ₹12,000 | ₹2,16,000 | ~₹6,00,000 |
| ₹2,000 | ₹24,000 | ₹4,32,000 | ~₹12,00,000 |
| ₹4,000 | ₹48,000 | ₹8,64,000 | ~₹24,00,000 |
How to open NPS Vatsalya account?
Opening an account is very easy. You can open it in two ways:
Offline: You can open this account by visiting your nearest bank, post office or any Points of Presence (PoP) center, filling the form and submitting the required documents.
Online: You can also easily open an account through the online platform of NPS Trust from the comfort of your home.
Required documents
Child’s birth certificate or school certificate
Parent/guardian’s KYC (Aadhaar card, PAN card, photo)
Bank account details
The government is working to reach this scheme to as many people as possible through TV, radio, social media and print campaigns through PFRDA.
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