NPS Vatsalya: the NPS account for children, with ₹250 minimum, withdrawal rules and what happens at 18
NPS Vatsalya is a National Pension System account for a child below 18, opened and run by a parent or legal guardian. Minimum: ₹250 to open and ₹250 each financial year, with no upper limit. Money is invested by a pension fund, so returns are market-linked, not guaranteed. After 3 years you can withdraw up to 25% of your own contributions for education, specified illness or disability over 75%. At 18 the child can continue till 21, shift to regular NPS, or exit (full lump sum only if the corpus is below ₹8 lakh).
Key facts Last verified: 25 Oct 2026
| Item | Details | Source |
|---|---|---|
| Who | Indian citizens below 18, including eligible NRIs and OCIs; account in the child's name, run by parent/guardian | PFRDA |
| Minimum | ₹250 at opening and ₹250 in each financial year; later deposits from ₹10; no maximum | PFRDA |
| Returns | Market-linked, not guaranteed; equity up to 100% possible | PFRDA |
| Partial withdrawal | After 3 years, up to 25% of own contributions (not returns); twice before 18, twice between 18 and 21 | PFRDA |
| At 18 | Continue till 21, shift to NPS, or exit; below ₹8 lakh full lump sum, else up to 80% lump sum + at least 20% annuity | PFRDA |
| Rules | NPS Vatsalya Scheme Guidelines 2025 | PIB |
| Launched | 18 September 2024 | PIB |
Anand and Meera in Pune opened NPS Vatsalya for their 4-year-old with ₹1,000 and a small standing instruction every month. Grandparents add a gift on birthdays. It's a long-term, market-linked account in the child's name. Not a substitute for an emergency fund or a fixed-return scheme, but a way to start early.
Key rules at a glance
| Item | Rule |
|---|---|
| Account holder | The child (PRAN in the child's name). Parent / legal guardian operates it until 18 |
| Who can open | A parent or legal guardian. A parent does not need their own NPS account or a government job |
| Minimum | ₹250 to open, ₹250 a year; extra deposits from ₹10; no maximum |
| Who can deposit | Parents, guardians, relatives and friends (as gifts), via PoPs, eNPS, UPI apps |
| Missed a year? | The account does not close just because a year's contribution was missed |
| Investment | A PFRDA-registered pension fund chosen by the guardian; returns not guaranteed |
| Charges | Same as the NPS All Citizen Model |
How to open
- Child's proof of date of birth: birth certificate, school leaving certificate, matriculation certificate, PAN or passport
- Guardian's KYC: Aadhaar, driving licence, passport, voter ID, NREGA job card or NPR document, plus PAN or Form 60
- Bank account: optional for resident Indians at opening, mandatory for NRIs/OCIs; needed later for withdrawal/exit
- Go to eNPS (online) or a bank / post office that is a registered Point of Presence (PoP).
- Choose NPS Vatsalya, enter the child's and guardian's details and upload documents.
- Pick a Central Recordkeeping Agency (CRA) and a pension fund.
- Pay at least ₹250. The child's PRAN is generated.
- Add money any time later (from ₹10) through eNPS, your PoP or UPI apps. Keep at least ₹250 a year.
Taking money out before 18
- Allowed only after 3 years from opening.
- Up to 25% of the contributions you made (not the returns).
- Only for: education of the child, treatment of specified illnesses, or disability over 75%.
- Maximum two withdrawals before 18, and two more between 18 and 21 (after fresh KYC).
What happens at 18
The child does fresh KYC, adds nominees and takes over the account. Then three choices:
| Choice | What happens |
|---|---|
| Continue | Stay in NPS Vatsalya up to age 21 |
| Shift to NPS | Move the whole corpus to regular NPS (All Citizen Model) |
| Exit | Corpus below ₹8 lakh: take it all as lump sum. ₹8 lakh or more: up to 80% lump sum, at least 20% must buy an annuity (pension) |
No choice made by 21? The account is moved automatically to a higher-equity scheme of the same pension fund under NPS rules.
Tax
| Stage | Old regime | New regime |
|---|---|---|
| Deposit | Deduction up to ₹50,000 for the parent/guardian (section 124(4) of the new Act, earlier 80CCD(1B)) | No deduction |
| Partial withdrawal (25%) | Exempt | Exempt |
| Exit lump sum | Up to 60% of corpus tax-exempt | Same |
NPS Vatsalya or Sukanya Samriddhi? You can have both. Sukanya (for girls) pays a fixed government rate (8.2% now; see small savings rates). NPS Vatsalya is market-linked and open to any child. Many parents use Sukanya for safety and NPS Vatsalya for long-term growth.
Frequently asked questions
What is the minimum amount for NPS Vatsalya?
₹250 to open the account and ₹250 in each financial year. Extra deposits can be as small as ₹10 and there is no upper limit.
Who can open an NPS Vatsalya account?
A parent or legal guardian, for an Indian child below 18 (including eligible NRIs and OCIs). Grandparents can open it only if they are the legal guardian, but anyone can gift money into it.
Can I withdraw from NPS Vatsalya before 18?
Yes, after 3 years, up to 25% of the contributions (not returns), for education, specified illnesses or disability above 75%, at most twice before 18.
What happens to NPS Vatsalya at 18?
The child can continue till 21, shift the corpus to regular NPS, or exit. Below ₹8 lakh the whole corpus can be taken; at ₹8 lakh or more, at least 20% must buy an annuity.
Is there a tax benefit on NPS Vatsalya?
Under the old regime, the parent can claim a deduction of up to ₹50,000. There is no deduction under the new regime.
Official links
Use only these government websites. HumainOne is not connected to any of them.
- PFRDA — NPS VatsalyaRules, documents, tax, FAQs
- PIB — NPS Vatsalya Guidelines 2025Summary of the guidelines
- NPS Trust — open NPS VatsalyaOnline opening (eNPS) links
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