NPS Vatsalya Pension Scheme for Children: Account Setup, Required Documents and Withdrawal Details

The newly launched NPS Vatsalya Pension Scheme offers a strategic way for parents to secure their children’s financial future through a specialized pension account . This scheme leverages the benefits of long-term investments and compounding to build wealth for minors, operated by a guardian.

# How to Open an NPS Vatsalya Account

Opening Locations and Platforms

In-Person: Accounts can be opened at Points of Presence (POPs) such as major banks, India Post , and Pension Funds.
Online: You can also set up an account via the e-NPS platform.

# Required Documents

For the Guardian

• Identity Proof: Aadhaar, Driving License, Passport , Voter ID, NREGA Job Card, or National Population Register document.
• Address Proof: Same as identity proof.

For the Minor

• Proof of Birth: Birth Certificate, School Leaving Certificate, Matriculation Certificate, PAN, or Passport.
• Bank Account: NRE/NRO Bank Account (solo or joint) if the guardian is an NRI.

# Contribution Details
Initial and Subsequent Contributions

• Opening Contribution: Minimum of ₹1,000, with no upper limit.
• Annual Contributions: Minimum of ₹1,000 per year, with no upper limit.

# Investment Choices

Default Option
Moderate Life Cycle Fund - LC-50: 50% equity exposure.

Auto Choice

• Aggressive Fund - LC-75: 75% equity exposure.
• Moderate Fund - LC-50: 50% equity exposure.
• Conservative Fund - LC-25: 25% equity exposure.

Active Choice

• Equity: Up to 75%.
• Corporate Debt: Up to 100%.
• Government Securities: Up to 100%.
• Alternate Assets: Up to 5%.

# Withdrawal and Exit Conditions

Partial Withdrawals

Up to 25% of the contribution allowed after a 3-year lock-in period for education, specified illnesses, or disabilities. This can be done up to three times.

# Transition at Age 18

• If Corpus > ₹2.5 lakh: 80% of the corpus must be used to purchase an annuity, while 20% can be withdrawn as a lump sum.
• If Corpus ≤ ₹2.5 lakh: The entire corpus can be withdrawn as a lump sum.

Death Benefits
In case of the minor’s death, the entire corpus will be returned to the guardian.

The NPS Vatsalya Pension Scheme offers a robust option for securing financial growth for children through flexible contributions, diverse investment choices, and structured withdrawal options.