NPS Vatsalya Scheme:- The NPS Vatsalya Scheme, a newly launched initiative by the Pension Fund Regulatory and Development Authority (PFRDA), is now available for minors, offering them a pathway to secure long-term financial stability through the National Pension System (NPS). Officially launched on September 18, 2024, NPS Vatsalya allows parents or guardians to contribute towards the pension savings of minors, ensuring early financial planning for the future. Prominent banks such as Axis Bank and ICICI Bank are among the financial institutions offering the scheme across their branches.
The scheme has garnered attention for being flexible, with both online and offline modes of account opening, thus making it accessible for all. Similar to other NPS accounts, the NPS Vatsalya account also features tiered investment options with exposure to equity markets, allowing for growth over time.
Let’s explore how fast and where you can open an NPS Vatsalya account, along with essential information about the scheme.
Top 5 Points to Know About NPS Vatsalya Scheme Account
How to Open an NPS Vatsalya Account: Online & Offline Methods
The NPS Vatsalya account can be opened through both online and offline platforms. Here’s a breakdown of the two methods:
- Online Process via eNPS:
The easiest and fastest way to open an NPS Vatsalya account is through the electronic platform (eNPS). This online system streamlines the entire process, from registration to making contributions. It offers a smooth, hassle-free experience for parents or guardians looking to open the account for their minor wards. Steps to Register Online:
- Visit the official NPS website or the specific portal for NPS Vatsalya.
- Find and click the ‘Register’ button.
- Fill in all the required details, including personal information of the guardian and the minor.
- Upload essential documents (KYC for guardian, birth certificate of the minor, etc.).
- Complete the process and receive confirmation of account creation.
Offline Process via Points of Presence (POP):
Parents or guardians who prefer to complete the registration offline can visit registered Points of Presence (POPs) such as banks or post offices authorized by PFRDA. Major banks like Axis Bank and ICICI Bank have joined the initiative, allowing customers to open the account at their branches. Steps for Offline Registration:
- Visit any registered POP or local branch of Axis Bank, ICICI Bank, or other authorized banks.
- Carry essential documents such as minor’s birth certificate, PAN card of guardian, and KYC documents.
- Fill out the necessary forms and submit them at the bank.
- Once approved, the NPS Vatsalya account will be opened for the minor.
Documents Required for NPS Vatsalya Account Opening
When opening an NPS Vatsalya account, it is crucial to have the appropriate documents for both the guardian and the minor. Below is a list of the essential documents:
- For the Minor:
- Proof of Date of Birth: Documents like the birth certificate, school leaving certificate, matriculation certificate, or PAN card.
- For the Guardian:
- KYC Documents: Identity and address proof such as Aadhaar Card, Passport, Driving License, Voter ID card, or NREGA job card.
- For Non-Resident Guardians (NRI):
- Bank Account: In case the guardian is an NRI, a Non-Resident External (NRE) or Non-Resident Ordinary (NRO) bank account is mandatory for making contributions to the minor’s account.
These documents must be verified at the time of submission, both for online and offline processes.
Online Login and Contribution Process
Once the NPS Vatsalya account is opened, guardians can easily manage contributions through the eNPS platform. The platform offers convenience, enabling parents or guardians to make periodic contributions and monitor the account status efficiently. Here’s how you can log in and manage your account online:
- Visit the official NPS website.
- Use the account credentials provided during registration to log in.
- Under the dashboard, you can check account details, make contributions, and view the investment portfolio.
- The platform also allows for easy tracking of investment performance, ensuring transparency in managing pension savings.
Key Features of NPS Vatsalya for Minors
The NPS Vatsalya scheme is designed to cater to minors with the objective of ensuring long-term financial security. The key features include:
- Contributory Pension Plan: Just like the regular NPS, this scheme is a contributory plan where guardians can make contributions on behalf of minors, benefiting from equity exposure and long-term savings growth.
- Flexible Investment Options: The scheme offers tiered savings options with a mix of equity, debt, and government securities, allowing for growth and financial security over time.
- Regulated by PFRDA: The scheme is overseen by the Pension Fund Regulatory and Development Authority (PFRDA), ensuring strict compliance and safety of funds.
- Tax Benefits: Contributions made towards NPS Vatsalya are eligible for tax benefits under Section 80C of the Income Tax Act, similar to the regular NPS account.
Where to Open NPS Vatsalya Account: Axis and ICICI Bank Branches
While eNPS offers a fast and efficient method of account opening, you can also visit the nearest branches of Axis Bank and ICICI Bank. These banks have been designated as registered Points of Presence (POPs) and can assist you with the entire process.
- Axis Bank: Parents or guardians can visit any Axis Bank branch with the necessary documents to open the account. Axis Bank offers a range of investment options under NPS Vatsalya, helping you select the best plan according to your financial goals.
- ICICI Bank: Similarly, ICICI Bank is also offering NPS Vatsalya accounts at its branches. The facility is available at all ICICI business centers, making it accessible for a wide range of customers.
Conclusion
The NPS Vatsalya Scheme is a robust financial product aimed at securing the future of minors through long-term investment in the National Pension System. By allowing early investments under a regulated pension system, this scheme sets the foundation for financial independence later in life. With both online and offline options, the process of opening an account has been made extremely accessible and convenient for parents and guardians.
Whether you prefer the ease of eNPS or the traditional branch-based process at Axis or ICICI Bank, opening an NPS Vatsalya account is a step towards building a secure financial future for your child.
FAQ
Q. Can I invest more than the minimum required amount?
Yes, you can invest more than the minimum INR 1,000. Higher investments may lead to higher returns, with compounded interest offering considerable growth over the years.
Q. How is the money invested in the NPS Vatsalya Yojana?
The invested money grows through compounded interest, and the scheme is structured to provide an annual return rate of approximately 14%.
Q. Can I track my account online?
Yes, once you open an account online, you can easily track and manage it through the NPS portal, allowing you to monitor investments and returns.
Q. Is there a penalty for early withdrawals?
There is no penalty for withdrawals after the 3-year lock-in period, but withdrawals before this time are not allowed.
Q. What is the maximum withdrawal limit if I invest more than INR 2.5 lakhs?
If your investment exceeds INR 2.5 lakhs, you are eligible to withdraw up to 20% of the total deposited amount.
Q. What happens if I stop making deposits?
If you stop making regular deposits, the account may become inactive, and you could miss out on accumulating interest. It’s advisable to keep contributing to maximize your returns.