NPS (New pension scheme) vs NPS Vatsalya

New pension scheme (NPS) is a pension scheme launched by Govt. of India in 2004. In the NPS, any person can contribute some amount annually up to 70 years, then he or she will receive monthly pension after retirement. It is a very popular market-based scheme among working employees, businessmen and others. And NPS Vatsalya is a program for aged up to 18 years, means minors. Both NPS and NPS Vatsalya can be opened through NPS website.

NPS (New pension scheme) details:

Backed by the Government of India, NPS provides impressive long-term savings options for a person to plan its retirement time efficiently by investing in this safe market-based plan.

New pension scheme (NPS) highlights:

1. New pension scheme (NPS) is Well Regulated & Transparent.
2. New pension scheme (NPS) is one of the Lowest Cost retirement product.
3. New pension scheme (NPS) may provide exclusive tax benefits to contributors, on employer’s contribution and employee’s contribution.
4. New pension scheme (NPS) provides the power to you to decide how and when to invest, where to invest and how you choose to retire.
5. NPS account holders can withdraw 60% of the corpus amount and rest 40% has to be used to buy annuity to get pension.

Who can apply or register for New pension scheme (NPS)?

1. Individual Subscribers:
   • Any Individual subscriber aged between 18-70 years can join New pension scheme (NPS).
   • Easy and multiple registration options (Aadhaar, Digilocker, PAN, Driving license etc.) are available to join New pension scheme (NPS).
   • You may register for New pension scheme (NPS) with minimum documents like Aadhaar / PAN / Driving license and signature.
   • Open Tier I (Pension A/c) and Tier II (Add-on investment A/c) – Tier I account is not withdrawable, but Tier I account is withdrawable like a normal mutual fund.
2. Government Subscribers:
   • Central Govt. / State Govt. (including autonomous bodies) employees covered in NPS.
   • Employees joined after applicable date mandatorily covered in NPS.
   • You may register for New pension scheme (NPS) with minimum documents like Aadhaar / PAN / Driving license and signature, Appointment/Offer Letter, Employee ID Card.
   • Open Tier I (Pension A/c), Tier II (Add on investment A/c), TTS A/c .
3. Corporate Subscribers:
   • Employees of Corporates who have adopted NPS can join.
   • You may register for New pension scheme (NPS) with minimum documents like Aadhaar / PAN / Driving license and signature.
   • Get additional Tax Benefits on employers contribution.
   • Flexibility in choosing contribution (employer/employee), pension fund etc.
4. NRI and OCI Subscribers:
   • Between 18-70 years can join on repatriation or non-repatriation basis.
   • Contributions to come from NRE and NRO A/c.
   • You may register for New pension scheme (NPS) with minimum documents like Aadhaar / PAN / Driving license and Scanned Signature, Foreign Address Proof, Scanned copy of Passport(NRI)/OCI Card.
   • For repatriation of amount, contributions should be made from NRE A/c only.

NPS Vatsalya (Minors) details:

NPS Vatsalya (Minors) is a Govt. of India savings plan for minors, launched on 18th September 2024. NPS Vatsalya (Minors) is a specialized NPS scheme for children. NPS Vatsalya (Minors) can be joined up to age of 18 years. After completing 18 years of age, this NPS Vatsalya (Minors) will be converted into normal New pension scheme (NPS) Tier-I account. So, actually NPS Vatsalya (Minors) is a real long-term savings cum retirement scheme to get rich. The minimum contribution amount is Rs.1000 per year to maintain NPS Vatsalya (Minors) account. And, there is no limit on the maximum contribution for NPS Vatsalya (Minors).

Who can apply or register for NPS Vatsalya (Minors)?

• Subscriber below 18 years of age may join NPS Vatsalya (Minors).
• Easy and multiple registration options (Aadhaar, Digilocker etc.) are available for NPS Vatsalya (Minors).
• NPS Vatsalya (Minors) is applicable for NRI & OCI Subscribers also.
• For NPS Vatsalya (Minors), contributions to come from NRE and NRO A/c (Applicable only for NRI/OCI Subscribers).

How to Open / Apply NPS Vatsalya Scheme online?

1. Go to enps.nsdl.com
2. click on ‘Register Now’ under the ‘NPS Vatsalya (Minors)’ tab.
3. Then enter all the details of guardian and minor, then proceed.
4. Do payment of initial Rs. 1000.
5. The PRAN will be generated and the NPS Vatsalya account will opened in the name of the minor.

The documents needed to join NPS Vatsalya (Minors):

You may register for New pension scheme (NPS) Vatsalya (Minors) with minimum documents like Aadhaar / PAN / Driving license and below documents.

• Date of Birth Proof of Minor.
• Guardian Signature.
• Scanned Copy of Passport (Applicable only for NRI Subscribers).
• Scanned copy of Foreign Address Proof (Applicable only for OCI Subscribers).
• Scanned copy of Bank Proof (Applicable only for NRI/OCI Subscribers).

Withdrawal rules and Exit rules of NPS Vatsalya scheme:

1. After completing minimum 3 years, one can withdraw up 25%, 3 times till the child turns 18.
2. At age of 18, before converting to standard NPS account, one can exit from NPS Vatsalya.
3. But, the condition is that, 80% of the corpus amount has to be re-invested into an annuity plan. Rest 20% can be withdrawn as a lump sum.
4. But if the corpus amount is below Rs 2.5 lakh, then 100% can be withdrawn as a lump sum at the exit.

NPS returns performance since inception:

NPS returns performance since inception has been shown below. The return is annualised, means every year you are getting this much percentage return. But, this performance may be changed in the future depending on the interest rates and market-based return. (source:NPS)