Finance Minister Sitharaman started NPS Vatsalya
New Delhi| Finance Minister Nirmala Sitharaman on Wednesday launched the NPS Vatsalya scheme, which will enable parents to save for the future of their children by investing in pension accounts. Parents can join NPS Vatsalya online or by visiting bank or post office. The minimum contribution for opening Vatsalya account is Rs 1,000. After this the subscriber will have to contribute Rs 1,000 annually.
Withdrawal guidelines from NPS accounts are being finalized. Launching the scheme, Sitharaman said that NPS has generated very competitive returns and provides people the option to save while ensuring future income. NPS Vatsalya is an extension of the already existing NPS for children. NPS has 1.86 crore subscribers in the last 10 years and has assets under management (AUM) of Rs 13 lakh crore.
Children under the age of 18 can open an NPS Vatsalya account, which will automatically be converted into a regular NPS account on completion of 18 years of age. Pension will come from the account only on attaining the age of 60. Sitharaman said the NPS has generated returns of 14 per cent, 9.1 per cent and 8.8 per cent for investments in equities, corporate loans and G-secs respectively. NPS Vatsalya was announced in the FY25 budget presented in July.
Several lenders, including ICICI Bank and Axis Bank, have joined hands with PFRDA to launch the National Pension Scheme (NPS)-Vatsalya. ICICI Bank launched the scheme by registering the accounts of some children under NPS Vatsalya at its service center in Mumbai.
Financial Services Secretary Nagaraju Maddirala said the government will pay attention to customer feedback and reform the pension scheme accordingly. Maddirala said, “Ever since we announced the proposed launch of Pradhan Mantri Vatsalya Yojana, we have been receiving responses and suggestions to improve this scheme. As we move forward and implement the Vatsalya plan, we will try to improve it so that the concerns expressed in the last one week can be taken care of.”
