Blitz Bureau
NEW DELHI: Finance Minister Nirmala Sitharaman on September 18 launched the NPS Vatsalya scheme, which will allow parents to save for their children’s future by investing in a pension account.
Parents can subscribe to NPS Vatsalya online or by visiting a bank or post office, according to media reports. The minimum contribution to open Vatsalya account is Rs 1,000. Subscribers will have to contribute Rs 1,000 annually thereafter. The guidelines for withdrawal from NPS accounts are being finalised. Launching the scheme, Sitharaman said NPS has generated very competitive returns and offers the option to people to save while ensuring future income.
NPS has generated 14 per cent, 9.1 per cent, and 8.8 per cent returns for investments in equity, corporate debt and G-Secs, respectively, Sitharaman said.
NPS Vatsalya is a specialised variant of the National Pension System (NPS) tailored for minor children. Parents or legal guardians can open and contribute to this account until the child attains the age of 18. Once the child reaches adulthood, the account can seamlessly transition into a standard NPS account. Investment under the scheme provides potential tax deductions under Section 80C of the Income Tax Act.
The scheme is backed by the Government of India, ensuring safety and credibility.
