PFRDA Notified NPS Vatsalya Scheme Guidelines, 2025: Check Eligibility, Contribution and More

The Pension Fund Regulatory and Development Authority (PFRDA) has notified the NPS Vatsalya Scheme Guidelines, 2025, offering detailed guidance on the National Pension System Vatsalya (NPS Vatsalya). This scheme is a contributory savings and long-term financial security initiative specifically designed for minors.

About NPS Vatsalya

NPS Vatsalya was first announced in the Union Budget 2024–25 and formally launched on 18 September 2024 by the Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman. The scheme empowers parents and legal guardians to begin structured, long-term financial planning for their children at an early age, with a seamless transition to the National Pension System upon attaining adulthood.

Aligned with the amendments to the PFRDA (Exits and Withdrawals under NPS) Regulations, 2015, the Guidelines provide flexible withdrawal and exit provisions, ensuring uninterrupted continuity of savings while safeguarding the long-term financial interests of minors.

Salient Features of NPS Vatsalya

Eligibility

• Available to all Indian citizens, including NRI and OCI children, below the age of 18
• The minor is the sole beneficiary
• The account is opened in the minor’s name and operated by a parent or legal guardian

Contributions

• Minimum initial and annual contribution of ₹250
• No upper limit on contributions
• Contributions may also be made as gifts by relatives and friends

Pension Fund Choice

• The guardian may select any one PFRDA-registered Pension Fund

Partial Withdrawal Facility

• Permitted after completion of three years from account opening
• Up to 25% of the subscriber’s own contributions (excluding returns)
• Allowed for specified purposes such as education, medical treatment, and disabilities
• Withdrawal allowed twice before 18 years and twice between 18 and 21 years, subject to prescribed conditions

On Attaining Majority

• Mandatory fresh KYC upon completion of 18 years
• Options available until 21 years include:

1. Continuing under NPS Vatsalya, or
2. Shifting to NPS Tier I (All Citizen Model or any other eligible model), or
3. Exiting the scheme with up to 80% of the corpus as alump sum, and at least 20% mandatorily annuitised
4. Full withdrawal permitted if the total corpus is ₹8 lakh or less

Also Read: PFRDA Forms Expert Committee to Develop Framework for Assured Payouts under NPS 

The Guidelines also introduce a targeted incentive framework for community-level functionaries such as Anganwadi workers, ASHAs, and Bank Sakhis, acknowledging their pivotal role in awareness generation and onboarding, particularly in rural and semi-urban regions.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.