Federal Bank has announced the launch of NPS Vatsalya, a pension scheme focused on minors and designed for parents aiming to secure their children’s future, the bank said in a release on September 26.
A pioneering initiative under the National Pension System (NPS), the scheme was launched by the Centre on September 18, 2024.
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NPS Vatsalya objective:
NPS Vatsalya aims to provide a secure and flexible retirement planning solution for children, ensuring long-term wealth accumulation through the power of compounding.
With a minimum annual contribution of just Rs 1,000, this scheme is accessible to families from all economic backgrounds, promoting financial inclusion and early financial planning.
“NPS Vatsalya is a significant step towards securing the financial future of our children. By starting early, we can ensure that they have a robust financial foundation,” said P V Joy, SVP & Country Head – Deposits, Wealth & Bancassurance of Federal Bank.
“We are glad to bring this initiative to the citizens of the country, as it is launched by the Government to promote long-term financial planning and security for all,” Joy was quoted as saying in the release.
NPS Vatsalya offers flexible investment options, allowing guardians to choose between active and auto investment choices across various asset classes.
Managed by reputable fund managers registered with the Pension Fund Regulatory and Development Authority (PFRDA), the scheme ensures expert handling of investments.
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NPS Vatsalya tax benefits:
Additionally, subscribers can benefit from tax deductions under Section 80 CCD (1) and Section 80 CCD (1B) of the Income Tax Act, making it a tax-efficient investment option. For more information, visit Federal Bank’s NPS page.
How to apply for NPS Vatsalya account?
Interested individuals can apply for NPS Vatsalya by visiting any of the designated Federal Bank branches or through the Bank’s online platform. Upon application, subscribers will receive a unique Permanent Retirement Account Number (PRAN) for all future transactions.
Steps to Open a NPS Vatsalya Account:
– Go to NPS website or the designated platform for NPS Vatsalya.
– Select ‘Register’:
– Look for the option to register for a new NPS account and select it.
– Provide Guardian Details:
– Enter the following guardian details:
Guardian Name: Full name of the guardian.
Date of Birth: Input in DD/MM/YYYY format.
Permanent Account Number (PAN): Enter the PAN of the guardian.
Mobile Number: Provide the guardian’s mobile number.
Email ID: Enter the guardian’s email address.
Enter minor’s details.
Fill in the required details for the minor (the child for whom the NPS Vatsalya account is being opened).
Complete KYC Requirements: Provide necessary KYC documents (like proof of identity and address) as per the guidelines.
Choose Investment Options: Select the investment option for the NPS account based on the available choices.
Review and Confirm: Review all entered information for accuracy and completeness.
Submit Application: Submit the application form for processing.
Receive Acknowledgment: Note the acknowledgment number or receipt for future reference.
Follow Further Instructions:
Follow any additional instructions provided via email or SMS to complete the registration process.
Once the application is processed, you will receive confirmation of the NPS Vatsalya account opening.
What are the exit options under the scheme?
The scheme matures after the subscriber turns 18. At that point, the subscriber will have an option to remain invested and keep continuing as a regular NPS member or make an exit. On such exit, at least 80% of accumulated corpus available in the account must be utilised for purchase of annuity and remaining balance shall be paid in lump sum.
In case, the accumulated pension wealth available in the account is equal to or less than Rs 2.5 lakh, or purchase of annuity is not available from empaneled Annuity Service Providers (ASPs), the subscriber shall have option to withdraw the entire accumulated pension wealth.
