Finance Minister Nirmala Sitharaman announced NPS 'Vatsalya' in the budget for the financial year 2024-25.
Union Finance Minister Nirmala Sitharaman launched the NPS Vatsalya Yojana in Delhi today (September 18). The Finance Minister announced the scheme while presenting the Budget 2024.
NPS Vatsalya will help ensure financial security for children as they grow up. Parents can invest in this scheme on behalf of their children. When the child attains majority, the account will be converted into regular NPS. A child can operate it by himself.
Union Finance Minister Nirmala Sitharaman launched NPS Vatsalya Yojana in Delhi.
NPS Vatsalya should be invested on birthdays of small children: Sitharaman Speaking at the launch of NPS Vatsalya Yojana, Nirmala Sitharaman said that parents and guardians should consider investing in NPS Vatsalya on birthdays and other occasions of their minor children.
NPS will help build a retirement fund A regular NPS scheme helps build retirement funds. NPS contribution is invested in market related instruments like stocks and bonds for higher returns.
Important Questions You Should Know About NPS 'Vatsalya' Scheme…
Question- What is the purpose of the plan? Answer- The scheme aims to inculcate the habit of financial planning and saving from childhood.
Question- Who is eligible for this scheme? Answer- All children up to 18 years.
Question- In whose name will the account be opened? Answer- The account will be opened in the name of the child only, but the parents will deposit the money as long as he is a minor.
Question- Will the child's parents also be among the beneficiaries of the scheme? Answer- No, the only beneficiary of this scheme will be the child in whose name the account is.
Question- How to open NPS Vatsalya Account? Answer- Accounts can be opened from Point of Presence (POP) in almost all banks, post offices and pension funds in the country. Users can also open this account through the online platform E-NPS.
Question- What is the minimum investment? Answer- A Vatsalya account can be opened with a minimum of Rs 1000. There is no upper limit on investment.
Question- Will it be possible to withdraw money midway through NPS Vatsalya? Answer- Yes, after a lock-in period of three years, 25% of the total deposit can be withdrawn. But it can be withdrawn only in case of education or illness.
question- How many times can a person withdraw money? Answer- A maximum of 25% of the total deposit can be withdrawn three times till the child reaches 18 years of age.
Question- When will it shift to normal NPS scheme? Answer- Once the child turns 18, his account can be shifted to NPS Tier-1 i.e. general public category.
Question- Are exits allowed in between? Answer- No, the scheme cannot be withdrawn until the child reaches 18 years of age.
A fund of Rs 63 lakh will be created in a SIP of Rs 10,000. All parents or guardians, be it Indian citizens, NRIs or OCIs, can open an 'NPS Vatsalya' account for their minor children. Suppose your child is 3 years old. If you make an SIP of Rs 10,000 in this scheme, when the child turns 18, the fund can be around Rs 63 lakh…
NPS was launched in 2004, it will provide regular income on retirement
- NPS was launched in 2004 to provide retirement income to all citizens of India. It is regulated by the Pension Fund Regulatory and Development Authority (PFRDA).
- Investors in the scheme can choose to invest in equity, corporate bonds, government bonds as per their choice. There is also an option to choose auto-choice life-cycle funds.
- On retirement, a part of the corpus is used to buy a policy. Tax deduction is also available u/s 80C and 80CCD(1B) of the Income Tax Act.
There are two types of NPS accounts, one can open from a bank There are two types of accounts available in NPS. Tier-1 account has withdrawal restrictions and minimum investment is Rs 500. While liquidity facility is available in Tier-II account. Its minimum contribution is Rs 1,000. It can be taken from the bank.
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