New Delhi: Finance Minister Nirmala Sitharaman is set to introduce the New Pension Scheme (NPS) 'Vatsalya' for children in New Delhi on September 18. The new pension scheme announced in the Union Budget 2024 which allows parents to contribute to their children's NPS accounts, helping them build a retirement fund and secure their financial future.
According to Ministry of Finance, the NPS Vatsalya events will be held simultaneously at around 75 locations across the country during the launch. However, these locations will connect via video conference, where PRAN (Permanent Retirement Account Number) membership cards will also be distributed to new minor subscribers.
FM Sitharaman will also unveil an online platform for subscribing to NPS Vatsalya, release a scheme brochure, and distribute PRAN cards to new minor subscribers. The scheme allows children to withdraw a portion of the accumulated corpus as a lump sum and receive the rest as regular pension payments.
“NPS 'Vatsalya' will allow parents to save for their children’s future by investing in a pension account and ensure long-term wealth with the power of compounding,” said the ministry.
It is important to note that upon reaching adulthood, the child's account will convert into a regular NPS account. Parents can start with a modest monthly contribution of Rs 500 or an annual contribution of Rs 6,000.
Under the NPS Vatsalya Scheme, parents are allowed to invest Rs 1,000 annually in the name of their child, making it accessible to families from all economic backgrounds.
NPS Vatsalya To Secure the Financial Future Of Children
This new initiative is designed to start early in securing the financial future of children, marking an important step in India’s pension system. The scheme will be run under the Pension Fund Regulatory and Development Authority (PFRDA).
“The launch of NPS Vatsalya highlights the government of India's commitment to promote long-term financial planning and security for all,” said the ministry. (With Inputs From IANS)
