Finance Minister Launches NPS Vatsalya Scheme for Children's Future

Finance Minister Nirmala Sitharaman launched the NPS Vatsalya scheme, aimed at allowing parents to save for their children's future through a pension account. The scheme requires a minimum annual contribution, is open to children under 18, and will convert to a regular NPS account when they turn 18.

In a significant move to secure the financial future of young Indians, Finance Minister Nirmala Sitharaman on Wednesday unveiled the NPS Vatsalya scheme. This initiative will enable parents to invest in a pension account dedicated to their children's future.

Parents can easily subscribe to the NPS Vatsalya scheme online or by visiting their nearest bank or post office. A minimum contribution of Rs 1,000 is required to open an account, with an annual contribution of the same amount.

Sitharaman highlighted NPS's competitive returns, noting the scheme's potential for saving while guaranteeing future income. The NPS Vatsalya is an extension of the existing National Pension Scheme, and it converts to a regular NPS account once the child reaches 18 years of age.

The scheme was introduced in the FY25 Budget, and many lenders, including ICICI Bank and Axis Bank, have collaborated with PFRDA to launch it. ICICI Bank marked the commencement of the scheme in Mumbai by enrolling children in NPS Vatsalya.

Financial Services Secretary Nagaraju Maddirala emphasized the government's openness to feedback, committing to improving the scheme based on subscriber responses.

(With inputs from agencies.)