The NPS Vasalya Scheme will encourage families to invest in their children's future financial security from an early age.
New Delhi: Union Finance Minister Nirmala Sitharaman launched the much awaited NPS Batsalya scheme announced in the budget of the financial year 2024-25 of the Modi government. The scheme is an initiative to secure the financial future of minors. The government and the Pension Fund Regulatory and Development Authority are finalizing the rules for the scheme, which is expected to give parents a structured way to build long-term wealth for their children.
The NPS Vasalya Scheme will encourage families to invest in their children's future financial security from an early age. Apart from Indian nationals, non-resident Indians will also get savings under the scheme. NPS Vasalya is a modified version of the National Pension System (NPS), specially designed for minors. Under this scheme, parents or guardians can open an NPS account for their children and deposit money in it regularly till the child turns 18. After the child reaches adulthood, the account will be converted directly into a regular NPS account, allowing the beneficiary to manage their investments and savings independently.
This NPS Salary Scheme will work in exactly the same way as a normal NPS account. One can invest in this scheme in the same way as one invests in NPS thinking about their retirement. Investing in NPS can be done through equity in the stock market, government bonds. As a result, the returns are likely to be much higher than conventional fixed deposits. When the minor turns 18, they have the option to opt out of the scheme, 80 per cent of the accumulated corpus has to be invested in an annuity plan, the remaining 20 per cent can be withdrawn in lump sum. NPS Basalya Accounts can be opened through Points of Presence (POP) including major banks, India Post, Pension Fund and online platform, e-NPS.
New Delhi: Union Finance Minister Nirmala Sitharaman launched the much awaited NPS Batsalya scheme announced in the budget of the financial year 2024-25 of the Modi government. The scheme is an initiative to secure the financial future of minors. The government and the Pension Fund Regulatory and Development Authority are finalizing the rules for the scheme, which is expected to give parents a structured way to build long-term wealth for their children.
The NPS Vasalya Scheme will encourage families to invest in their children's future financial security from an early age. Apart from Indian nationals, non-resident Indians will also get savings under the scheme. NPS Vasalya is a modified version of the National Pension System (NPS), specially designed for minors. Under this scheme, parents or guardians can open an NPS account for their children and deposit money in it regularly till the child turns 18. After the child reaches adulthood, the account will be converted directly into a regular NPS account, allowing the beneficiary to manage their investments and savings independently.
This NPS Salary Scheme will work in exactly the same way as a normal NPS account. One can invest in this scheme in the same way as one invests in NPS thinking about their retirement. Investing in NPS can be done through equity in the stock market, government bonds. As a result, the returns are likely to be much higher than conventional fixed deposits. When the minor turns 18, they have the option to opt out of the scheme, 80 per cent of the accumulated corpus has to be invested in an annuity plan, the remaining 20 per cent can be withdrawn in lump sum. NPS Basalya Accounts can be opened through Points of Presence (POP) including major banks, India Post, Pension Fund and online platform, e-NPS.
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