Nirmala Sitharaman launches NPS Vatsalya, parents can open pension accounts for children
- In Reports
- 12:38 PM, Sep 19, 2024
- Myind Staff
Finance Minister Nirmala Sitharaman while presenting her budget introduced a new scheme NPS Vatsalya, which has been designed to assist parents in saving for their children's future by opening a pension account. Parents can apply online or register at a bank or post office. The account starts with a minimum initial contribution of Rs 1,000, with a yearly contribution of at least Rs 1,000. The guidelines pertaining to NPS account withdrawal are currently being finalised. At the program's launch, Sitharaman stated that NPS has produced extremely competitive returns and gives consumers the choice to save while guaranteeing their future earnings.
The current National Pension System (NPS) for children has been expanded with NPS Vatsalya. NPS has a large customer base with 1.86 crore subscribers and Rs 13 lakh crore in assets under management (AUM) over the past ten years. Under the NPS Vatsalya scheme children under the age of can avail themselves by initiating an account. The account will be automatically converted to a regular NPS account when the beneficiary turns 18. They can only begin getting pension benefits after they reach the age of sixty.
According to Sitharaman, NPS has produced returns on equity, corporate debt, and G-Secs investments of 14%, 9.1%, and 8.8%, respectively.
NPS Vatsalya was introduced in the FY25 Budget under the National Pension System. It has partnered with the Pension Fund Regulatory and Development Authority (PFRDA) and banks like ICICI Bank and Axis Bank. ICICI Bank first kicked off the scheme in Mumbai by registering children under NPS Vatsalya. Financial services secretary Nagaraju Maddirala said that the government would take into account the subscriber's feedback to add improvements to the scheme accordingly.
Maddirala added, “Ever since we have announced the proposed launch of PM Vatsalya scheme, we have been getting feedback and suggestions to improve the scheme. As we go along and implement the Vatsalya scheme, we will try to improve so that concerns expressed in the last one week are taken care of.”
Image source: The Munsif Daily
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