A Secure Financial Foundation for Your Child’s Future

NPS Vatsalya is a long-term contributory savings and pension scheme for minors. Designed to encourage early financial planning, NPS Vatsalya enables parents and legal guardians to systematically build long-term savings for their children, with a seamless transition to the National Pension System (NPS) upon attaining majority.

By starting early, NPS Vatsalya helps inculcate disciplined investing while leveraging the power of compounding to create meaningful long-term financial security.

What is NPS Vatsalya?

NPS Vatsalya is a minor-specific NPS account, opened in the name of the child and operated by a parent or legal guardian. The minor remains the sole beneficiary of the account. On attaining the age of 18, the account can either continue under NPS Vatsalya, transition into a regular NPS account or be exited as per the applicable regulations.

Key Features of NPS Vatsalya

    Eligibility
  • Open to all Indian citizens, including NRI/OCI, below 18 years of age
  • Account opened in the name of the minor
  • Operated by a parent or legal guardian
    Contributions
  • Minimum initial contribution: ₹250
  • No maximum limit on contributions
  • Contributions can also be gifted by relatives and friends

Investment Strategy & Asset Allocation

NPS Vatsalya follows a diversified, growth-oriented investment approach while maintaining adequate stability through debt instruments.

Permitted Asset Classes & Indicative Limits

Asset Class Indicative Allocation
Government Securities & related investments 15% – 20%
Debt Instruments & related investments 10% – 30%
Short-term Debt / Money Market Instruments* Up to 10%
Equity & related investments 50% – 75%

*The money market limit becomes applicable once the scheme corpus exceeds ₹5 crore.

This structure ensures:

  • Higher equity exposure for long-term growth
  • Risk diversification through government and corporate debt
  • Liquidity support through short-term instruments, where applicable

Partial Withdrawal Facility

  • Allowed after completion of 3 years from account opening
  • Up to 25% of own contributions (excluding returns)
  • Permitted for:
    • Education
    • Medical treatment
    • Specified disabilities
  • Withdrawals allowed:
    • Twice before attaining 18 years
    • Twice between 18 and 21 years, subject to conditions

On Attaining Majority (18 Years)

Fresh KYC is mandatory once the subscriber attains 18 years. The following options are available until the age of 21:

  • Continue under NPS Vatsalya, or
  • Shift to NPS Tier I (All Citizens Model or other applicable model), or
  • Exit from the scheme with:
    • Up to 80% as lump sum
    • Minimum 20% to be annuitised
    • Full withdrawal permitted if total corpus is ₹8 lakh or less

Why Choose NPS Vatsalya?

  • Early Start Advantage: Longer investment horizon enhances compounding benefits
  • Disciplined Savings: Encourages structured, goal-based investing
  • Regulated & Transparent: Governed by PFRDA with clear guidelines
  • Flexible Contributions: Small amounts can make a big difference over time
  • Seamless Continuity: Smooth transition into NPS on attaining adulthood

Why LIC Pension Fund for NPS Vatsalya?

  • Backed by the trust and legacy of LIC of India
  • Experienced and disciplined fund management
  • Strong focus on long-term retirement outcomes
  • Transparent processes and regulatory compliance

Open NPS Vatsalya account by clicking here.