NPS-Vatsalya Scheme launched by Finance Minister Nirmala Sitharaman

Current Context: The NPS-Vatsalya Scheme was launched by Finance Minister Nirmala Sitharaman on September 18, 2024. This scheme is designed to help parents secure their children’s financial future by creating a long-term corpus.

• Key Details:
• Purpose: The primary goal is to build a financial corpus for children until they reach the age of 18. It aims to inculcate early savings and investment habits among parents for their children’s future.
• Eligibility:
• Minors (children under 18 years of age) are eligible.
• Parents or guardians can open and operate the accounts on behalf of the minors.
• Investment Amount:
• The minimum annual contribution is ₹1,000.
• There is no maximum limit on the investment.
• Benefits:
• The scheme leverages the power of compounding, ensuring that even small, regular investments can grow into a substantial corpus over time.
• The maximum exposure to equities is capped at 75%, balancing risk and potential returns.
• Parents can open the account through major banks, post offices, pension funds’ offices, or the e-NPS portal.
• This initiative is part of the broader National Pension System (NPS) and is regulated by the Pension Fund Regulatory and Development Authority (PFRDA).

Question:

1 What is the minimum annual contribution required for the NPS-Vatsalya Scheme?

• A) ₹500
• B) ₹1,000
• C) ₹3,000
• D) ₹5,000

Answer: B) The minimum contribution required is ₹1,000 annually, making it accessible for most families.