HomeEconomyNPS 'Vatsalya' scheme will be launched on September 18: This scheme was announced in...
NPS 'Vatsalya' scheme will be launched on September 18: This scheme was announced in the budget, parents will be able to invest in it on behalf of children
All parents and guardians, whether Indian citizens, NRIs or OCIs, can open NPS Vatsalya Account for their minor children.
Union Finance Minister Nirmala Sitharaman will launch the NPS 'Vatsalya' scheme in Delhi on September 18. Business Standard has given this news quoting sources. Finance Minister Nirmala Sitharaman had announced this scheme while presenting Budget 2024.
NPS Vatsalya is designed to help ensure financial security of children as they grow up. Parents can invest in this scheme on behalf of children. On attaining adulthood, the account will be converted into regular NPS.
NPS helps in creating retirement fund
NPS 'Vatsalya' can also be converted to a non-NPS scheme when the child turns 18. The regular NPS scheme helps in building a retirement fund. NPS contributions are invested in market-linked instruments like stocks and bonds for higher returns.
A fund of Rs 63 lakh will be created in a SIP of Rs 10,000
All parents and guardians, whether Indian citizens, NRIs or OCIs, can open NPS Vatsalya accounts for their minor children. Suppose your child is 3 years old. If you do a SIP of Rs 10,000 in this scheme, then a fund of about Rs 63 lakh can be accumulated when the child turns 18…
NPS was started in 2004, it provides 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).
Subscribers can choose fund allocation as per their choice between equity, corporate bonds, government bonds. There is also an option to choose auto-choice lifecycle funds.
On retirement, a portion of the corpus is used to purchase an annuity. One also gets the benefit of deduction under Income Tax Act 80C and 80CCD(1B).
You can get two types of NPS accounts from the bank
There are two types of accounts available in NPS. There is a restriction on withdrawal in Tier I account and the 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 through the bank.
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