Now, pension accounts can be opened for minors in India, allowing parents to build a large financial corpus for their children over the long term.
This initiative aims to secure the future of minors by linking them to pension benefits.
Finance Minister Nirmala Sitharaman has launched the NPS Vatsalya Scheme specifically for minors, offering them the pension benefits they were previously unable to access.
PRAN Cards Distributed to Children
At the launch of the NPS Vatsalya Yojana, the Finance Minister distributed Permanent Retirement Account Numbers (PRAN) to nine children.
She urged parents to contribute to children’s NPS Vatsalya accounts during celebrations like birthdays.
Sitharaman emphasized that this small contribution could help build a significant financial reserve for the child’s future.
She also noted that if such a scheme had existed earlier, many of today’s senior citizens would have benefited from pensions.
The scheme encourages parents to save and invest for their children, fostering a habit of long-term financial planning.
NPS Vatsalya Scheme: Transition to Regular NPS
The NPS Vatsalya Scheme is managed by the Pension Fund Regulatory and Development Authority (PFRDA).
Deepak Mohanty, the PFRDA Chairman, highlighted that pensions were once seen as benefits only for government employees.
However, with the National Pension System (NPS), these benefits are now available to private sector employees and the general public.
Under the NPS Vatsalya Scheme, minors will be linked to pension benefits, and once they reach adulthood, their accounts will be converted into regular NPS accounts.
When the individual starts working, their account can be transferred to their employer’s NPS account.
Mohanty also pointed out that pension assets are long-term investments that can greatly benefit both individual financial security and the broader economy.
Since 31% of India’s population is below the age of 18, starting retirement planning early can lead to substantial gains in the future.
Key Features of NPS Vatsalya Scheme
The NPS Vatsalya Scheme allows parents to save for their children’s future by contributing to a pension account, helping build a large corpus over time.
The scheme offers flexible contributions and investment options, with a minimum annual investment of Rs 1,000 in the child’s name.
How to Open an NPS Vatsalya Account
1) The NPS Vatsalya Account can be opened with an annual contribution of just Rs 1,000.
2) Accounts can be opened by visiting bank branches or applying online.
3) The facility to open an NPS Vatsalya account is also available at post offices and PFRDA offices.
