NPS Vatsalya Scheme Guidelines 2025 – Complete Step-by-Step Update
NPS Vatsalya Scheme Guidelines 2025 – Complete Step-by-Step Update
The Pension Fund Regulatory and Development Authority (PFRDA) has issued the NPS Vatsalya Scheme Guidelines 2025, bringing clarity and detailed rules for the National Pension System (NPS) scheme meant exclusively for minors. Below is a step-by-step, point-wise and easy-to-understand explanation covering all important aspects of the circular.
1. What is NPS Vatsalya?
NPS Vatsalya is a pension and long-term savings scheme for minors.
It allows parents or legal guardians to invest on behalf of a child.
The scheme was announced in Union Budget 2024–25 and launched on 18 September 2024.
On attaining 18 years of age, the account can be converted into a normal NPS account.
2. What is New in the 2025 Guidelines?
The earlier circular dated 18 September 2024 has been superseded.
PFRDA has issued comprehensive and consolidated guidelines called “NPS Vatsalya Scheme Guidelines 2025”.
The scheme is now officially classified as a Specific Purpose Scheme under Regulation 4A of NPS Exit & Withdrawal Regulations.
3. Objective of NPS Vatsalya
To encourage savings habit from an early age.
To promote financial literacy and long-term financial planning.
To build a secure retirement corpus for children.
To align with the vision of Viksit Bharat @2047.
4. Who Can Join the Scheme?
All Indian citizens below 18 years of age.
NRIs and OCIs below 18 years are also eligible.
Account must be opened and managed by a parent or legal guardian.
The child is the sole beneficiary of the account.
5. Role of Parent / Guardian
Parent or guardian opens and operates the account till the child turns 18.
Guardian acts as the point of contact for all transactions.
Management rights are transferred to the subscriber after completion of KYC at 18 years.
6. Account Structure
A Permanent Retirement Account Number (PRAN) is issued in the child’s name.
The account is operated for the exclusive benefit of the minor.
After 18 years, fresh KYC and nominee details are mandatory.
7. Documents Required to Open Account
Proof of Date of Birth of minor (Birth Certificate, School Certificate, PAN, Passport, etc.)
KYC of Guardian (Aadhaar, Passport, Voter ID, etc.)
PAN of Guardian or Form 60
Bank account details (mandatory for NRI/OCI minors)
8. Minimum & Maximum Contribution
Minimum contribution: ₹250 per year
No maximum contribution limit.
Contributions can be made by:
Parents or guardians
Relatives or friends (as gifts)
9. Modes of Contribution
Through Points of Presence (PoPs) like banks and post offices
Online platforms of PoPs
eNPS portal of NPS Trust
Any other electronic mode approved by PFRDA
10. Investment Pattern
Contributions are invested through PFRDA-registered Pension Funds with the following limits:
Equity: 50% to 75%
Government Securities: 15% to 20%
Debt Instruments: 10% to 30%
Money Market Instruments: Up to 10% (once corpus exceeds ₹5 crore)
11. Charges and Fees
Charges are same as NPS All Citizen Model.
Includes POP charges, CRA charges, fund management fee, custodian charges, etc.
12. Partial Withdrawal Rules (Before 18 Years)
Partial withdrawal is allowed only for:
Education of the minor
Treatment of specified illnesses
Disability above 75%
Conditions:
Account must be at least 3 years old.
Maximum 25% of contributions (returns excluded).
Maximum 2 withdrawals till age 18.
13. What Happens After Attaining 18 Years?
Subscriber continues under NPS Vatsalya for up to 3 years.
Fresh KYC and nominee details are mandatory.
After KYC, subscriber can:
Shift to NPS All Citizen Model, or
Withdraw up to 80% lump sum and buy annuity for balance, or
Withdraw 100% if corpus is below ₹8 lakh.
14. If No Action is Taken Till Age 21
Account is shifted to high-risk (higher equity) variant.
General NPS exit rules apply thereafter.
15. In Case of Death
Entire corpus is paid to guardian/nominee/legal heir.
Option to transfer proceeds to their own NPS account.
16. Incentive for Enrollment
Incentive of up to ₹100 per account for:
Anganwadi workers
ASHA workers
Bank Sakhis and other government-recognised workers
Aimed at increasing penetration in rural and semi-urban areas.
17. How to Open NPS Vatsalya Account?
Through PoPs (banks, post offices, pension funds)
Online PoP platforms
eNPS portal
18. Grievance Redressal
Complaints can be lodged via Central Grievance Management System (CGMS).
Resolution timeline: within 30 days.
Conclusion
The NPS Vatsalya Scheme Guidelines 2025 bring clarity, structure and transparency to child-focused retirement planning, encouraging disciplined long-term savings from an early age.
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