New Delhi: Pension is considered a very good source of income after retirement. To promote pension, the government had announced the NPS Vatsalya Scheme in Budget 2024 this year.

Finance Minister Nirmala Sitharaman had said in the budget speech that children will get the benefit of pension in a way under the NPS Vatsalya scheme. Keeping in mind the future of children, Finance Minister Nirmala Sitharaman will launch the NPS Vatsalya scheme today. Let us know about this scheme in detail.

What is NPS Vatsalya Scheme?

Parents or guardians can invest in this scheme to make the future of children bright. This scheme has been started with the aim that when children grow up, they should be financially stable. There is no eligibility for investing in this scheme, that is, all citizens of India can invest in this scheme. This scheme will be operated by the Pension Fund Regulatory and Development Authority (PFRDA).

Investment Limit in NPS Vatsalya Scheme 

There are many options for investing in NPS Vatsalya Yojana. The investor has to choose one of these options. A minimum annual investment of Rs 1000 has to be made in this scheme. However, there is no limit on maximum investment.

Premature withdrawal option

In this scheme, the investor also has the option of pre-mature withdrawal. This means that the amount can be withdrawn from the scheme before maturity. This scheme has a lock-in period of 3 years, that is, the investor cannot make any withdrawal till 3 years after the date of investment.

25% of the fund can be withdrawn for illness or education. In case of disability, the investor can withdraw more than 75% of the amount. Partial withdrawal is allowed only 3 times till the child turns 18 years old.

When does the scheme mature

The scheme matures when the child turns 18 years old. If the amount in the fund is less than Rs 2.5 lakh, then a lump sum withdrawal can be made. However, if the amount is more than Rs 2.5 lakh, only 20 percent of the amount can be withdrawn. Annuity can be purchased with the remaining amount. This will give the child the benefit of a fixed amount i.e. pension every month.

At the same time, you can continue this scheme even after the child turns 18 years old. If you want to continue the scheme even after the child turns 18, then you will have to inform about it in advance. After this, NPS Vatsalya will be made NPS Tier-1. After the child turns 18, KYC will have to be done again within three months.