Finance Desk – Finance Minister Nirmala Sitharaman has launched a new savings plan called NPS Vatsalya, specially designed for children. This plan helps families start saving early for their children’s future.
What is NPS Vatsalya?
It’s a part of the National Pension System but for kids under 18. Parents or guardians can open this pension account for their children.
How does it work?
- You can start saving with a minimum of Rs 1,000 per year.
- You can choose how to invest the money based on how much risk you’re comfortable with.
- When the child turns 18, their account automatically becomes a regular pension account.
Where can you open an account?
You can open an account at:
- Registered banks, India Post, or other financial institutions.
- Online through the NPS Trust’s website.
What do you need to open an account?
- A document showing the child’s date of birth, like a birth certificate.
- ID proof of the parent, like Aadhaar or a passport.
Choices for investing:
- You can choose safer options like government bonds or riskier options like stocks.
- There are pre-set investment plans based on age and risk, or you can choose your own mix.
How to withdraw the money:
- When the child is 18, they can manage the account. If there’s a lot of money saved, most of it must be used to buy an annuity (a retirement income), but some can be taken as cash.
- If the savings are below a certain amount, all the money can be taken out at once.
- If the child or the guardian passes away, the saved money will be returned to the family.
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