The feature of Minor Benefit Account is available in National Pension System (NPS) and under NPS Vatsalya scheme. The childhood policy implemented for this reason seeks to ensure that children start saving for retirement at their youthful age.
What is NPS Vatsalya?
NPS Vatsalya lets parents create a pension account in the name of a child and give a minimum of ₹1,000 every month. Compounding, there is also no maximum deposit that can be made. Another advantage of the scheme is that it molds the child discipline nature in saving from their childhood. If the child is below 18 years of age, a parent or guardian shall be the one to operate the account. In future, when the child becomes an adult, the account could be transferred to a normal NPS account.
Eligibility for NPS Vatsalya
Who can open the account?
Any citizen of India up to eighteen years of age can open an NPS Vatsalya account for himself/herself.
How to open the account?
Individual accounts can be opened through registered Points of Presence (PoPs) namely the various banks or India Post or the online platform called eNPS offered by the NPS Trust.
Required Documents
To open an NPS Vatsalya account, you’ll need the following:
- Age proof of the minor in terms of date of birth.
- KYC of the guardian.
- The Permanent Account Number (PAN) of the parent or the guardian of the child.
- Bank account details (NRE/NRO).
Why you should invest in NPS Vatsalya?
The proposition of NPS Vatsalya is also beneficial for the parents, especially those, who are raising a child and want him or her to save something for the future. Being a tax-efficient investment strategy, it also provides both equity and debt investment solutions for long-term growth.
Expert Opinions
While some experts opine that NPS Vatsalya is a good product for wealth creating tool for children for their retirement. It may be most valuable for those with a child with a disability or for anyone who would like to begin saving for retirement while their child is still a baby.
