New Delhi: When children grow old and retire, parents can start planning for their financial security from now itself. Keeping this thought in mind, the National Pension System (NPS) Vatsalya Scheme has been introduced by the Pension Fund Regulatory and Development Authority (PFRDA).

Finance Minister Nirmala Sitharaman launched the scheme on Wednesday. She appealed to people to gift NPS Vatsalya along with gifts to children on their birthday parties. The Finance Minister said that if this type of facility had been available earlier, then all the senior citizens of today would have been getting pension.

You can open an account with a grant of Rs 1000

Now every parent can open an account for their children below 18 years of age under the NPS Vatsalya Scheme with a contribution of just Rs 1000 per year. As soon as the child turns 18, the account will automatically be converted into a normal NPS account and the child will continue to get the benefit of this NPS fund in the form of pension after the age of 60 years.

Like the NPS account, the money of the Vatsalya scheme will be invested in equity and debt funds. Currently, 31 percent of the country's population is below 18 years of age. The launch of the NPS Vatsalya scheme was announced in the budget for the current financial year 2024-25. Minister of State for Finance Pankaj Chaudhary said on this occasion that the NPS Vatsalya scheme has been started keeping in mind the creation of a developed India with financial and economic security of the new generation.

Special features of NPS Vatsalya

Savings-cum-pension scheme regulated and administered by PFRDA.

All minor citizens up to the age of 18 years are eligible for this.

To open an account, the annual contribution is just Rs 1000 and there is no maximum limit.

Account can be opened through any bank, post office or e-NPS.

Required documents like certificate of date of birth of minor, Aadhaar for KYC of guardian, driving license etc.

The account will be operated by the guardian, but the beneficiary will be a minor only.

Parents can choose from any of the pension funds registered with PFRDA.

Direct transfer to NPS for all citizens on attaining the age of 18 years.