- ₹250Minimum a yearNo upper limit
- Under 18Child's age to open
- 25%Of contributionsPartial withdrawal after 3 years
- ₹50KTax deductionOld regime, Section 124(4)
What is NPS Vatsalya?
NPS Vatsalya is a savings and pension account for a child. It is part of the National Pension System (NPS) and is regulated by PFRDA, the pension regulator. It was announced in the Union Budget 2024-25 and launched on 18 September 2024.
A parent or guardian opens the account in the child's name and runs it until the child turns 18. The child is the only owner of the money. A PRAN (Permanent Retirement Account Number) is issued in the child's name. The money is invested in shares and bonds, so the value goes up and down with the markets.
- Step 1Parent pays inAt least ₹250 a year, until the child is 18.
- Step 2Pension fund investsIn shares and bonds. Returns are not fixed.
- Step 3Child decides at 18Keep it, move to normal NPS, or exit, by age 21.
Example: Sunita and baby Aarav. Sunita opens NPS Vatsalya for Aarav at birth and pays ₹1,000 a month for 18 years. If the money earns 10% a year (an assumption, not a promise), this is what Aarav has at 18.
- Paid in
- ₹2,16,000
- Value at 18
- ₹6,05,568
- Growth
- ₹3,89,568
NPS Vatsalya new rules 2026: what changed
PFRDA issued the NPS Vatsalya Scheme Guidelines 2025 on 7 January 2026 (circular PFRDA/2026/02/NPS-Vatsalya/01). They replaced the first rules of September 2024 and are in force from 23 February 2026. Old accounts moved to the new rules with the same pension fund.
| Rule | Until 22 February 2026 | From 23 February 2026 |
|---|---|---|
| Minimum contribution | ₹1,000 a year | ₹250 a year |
| Partial withdrawals | Up to 3 before 18 | 2 before 18, 2 more from 18 to 21 |
| Exit at 18 | At least 80% to an annuity | Up to 80% as cash, at least 20% to an annuity |
| Full withdrawal | Corpus up to ₹2.5 L | Corpus below ₹8 L |
| At 18 | Moved to NPS Tier I | Child chooses, any time from 18 to 21 |
| Investment | Guardian picked auto or active choice | Pension fund invests in a set pattern |
NPS Vatsalya eligibility: who can open the account
- Yes: Any Indian citizen child below 18, boy or girl
- Yes: NRI and OCI children below 18
- Yes: Opened by a parent or a legal guardian
- Yes: Parents with or without their own NPS account
- Yes: Grandparents, only if they are the legal guardian
- No: A child aged 18 or more (a new account cannot be opened)
- No: More than 1 NPS Vatsalya account for the same child
- No: The child running the account alone before 18
Grandparents, relatives and friends who are not the guardian cannot open the account, but they can gift money into it. The parent or guardian is the nominee until the child turns 18.
How to open NPS Vatsalya: eNPS, bank or post office
- Step 1Online on eNPSThe eNPS platform of NPS Trust, or the online NPS service of a bank.
- Step 2At a bank branchAny bank that is a Point of Presence (PoP) for NPS.
- Step 3At a post officeIndia Post is an NPS Point of Presence.
- Step 4Give KYCChild's birth proof, guardian's KYC and PAN or Form 60.
- Step 5Choose a fund and CRAPick a pension fund and a record-keeping agency (CRA).
- Step 6Pay and get the PRANPay at least ₹250. A PRAN is issued in the child's name.
NPS Vatsalya documents:
| For | Documents |
|---|---|
| Child | Proof of date of birth: birth certificate, school leaving certificate, matriculation certificate, PAN or passport |
| Parent or guardian | KYC: Aadhaar, passport, driving licence, voter ID, NREGA job card or National Population Register document, plus PAN or Form 60 |
| Court-appointed guardian | A copy of the court order, with the KYC documents |
| NRI or OCI | The child's own or joint NRE or NRO bank account (must be given) |
| Bank account (residents) | Optional at opening, but the child's own or joint bank account is needed for a withdrawal or exit |
Anganwadi workers, ASHA workers and Bank Sakhis can also help families open the account. PFRDA pays them up to ₹100 for each account.
NPS Vatsalya minimum contribution: ₹250 a year
- To open: at least ₹250.
- Every year: at least ₹250 in each financial year (April to March). Each later payment can be as small as ₹10, and you can pay as many times as you like.
- Maximum: there is no upper limit. The tax deduction has its own limit (see below).
- Who can pay: the parent or guardian, and also relatives and friends as a gift.
- How to pay: at a PoP branch by cheque or cash with an NPS contribution slip, on eNPS, through a PoP's app or website, or through UPI apps.
- Missed a year: PFRDA says the account does not close only because no contribution was made in a year. Ask your PoP or CRA what is needed to make it regular again.
NPS Vatsalya investment options and returns
The guardian chooses a pension fund registered with PFRDA, and can change it once a financial year. The pension fund then invests the money. Under the new rules, the guardian does not pick the mix of shares and bonds. The pension fund follows this indicative pattern:
| Where the money goes | Share of the money |
|---|---|
| Shares (equity) | 50% to 75% |
| Government securities | 15% to 20% |
| Company bonds and other debt | 10% to 30% |
| Short-term money market | Up to 10%, once the scheme crosses ₹5 Cr |
A pension fund may instead set its own mix for NPS Vatsalya, with up to 100% in shares, as in the Multiple Scheme Framework. So the mix can differ from one pension fund to another. There is no fixed interest rate and returns are not guaranteed. Charges are the same as for a normal NPS account.
How much NPS Vatsalya can grow. These figures assume a steady yearly return, paid monthly. Real returns will be different.
| Saving | Paid in | At 8% | At 10% | At 12% |
|---|---|---|---|---|
| ₹500 a month for 10 years | ₹60,000 | ₹92.08K | ₹1.03 L | ₹1.16 L |
| ₹500 a month for 18 years | ₹1,08,000 | ₹2.42 L | ₹3.03 L | ₹3.83 L |
| ₹1,000 a month for 10 years | ₹1,20,000 | ₹1.84 L | ₹2.07 L | ₹2.32 L |
| ₹1,000 a month for 18 years | ₹2,16,000 | ₹4.83 L | ₹6.06 L | ₹7.65 L |
| ₹2,000 a month for 10 years | ₹2,40,000 | ₹3.68 L | ₹4.13 L | ₹4.65 L |
| ₹2,000 a month for 18 years | ₹4,32,000 | ₹9.67 L | ₹12.11 L | ₹15.31 L |
| ₹5,000 a month for 10 years | ₹6,00,000 | ₹9.21 L | ₹10.33 L | ₹11.62 L |
| ₹5,000 a month for 18 years | ₹10,80,000 | ₹24.16 L | ₹30.28 L | ₹38.27 L |
NPS Vatsalya withdrawal rules
A partial withdrawal means taking out part of the money while the account stays open. NPS Vatsalya allows it only for these reasons:
- Step 1EducationThe child's education.
- Step 2IllnessTreatment of a specified illness of the child.
- Step 3DisabilityDisability of more than 75% of the child.
- When: only after 3 years from the date the account was opened.
- How much: up to 25% of the contributions. The returns earned are not counted.
- How many times: 2 times before 18. After 18, once the child completes KYC, 2 more times until 21.
- Proof: a self-declaration is enough. The money goes to the child's own or joint bank account.
- Tax: a partial withdrawal within these limits is tax-free.
Example: Aarav's school fees. After 10 years, Sunita has paid in ₹1,20,000. For Aarav's education, she can take out up to 25% of that amount, whatever the account is worth.
- Paid in so far
- ₹1,20,000
- Most she can take
- ₹30,000
- Withdrawals left before 18
- 1 after this one
What happens to NPS Vatsalya at 18
When the child turns 18, the child must complete fresh KYC and give nominee details. The account is then handed over to the child. Until KYC is done, no money can be taken out, but the money keeps earning returns. The child then has until 21 to choose one of three options:
- Step 1Stay in NPS VatsalyaKeep the account running until age 21.
- Step 2Move to normal NPSThe whole amount moves to NPS Tier I (All Citizen Model).
- Step 3ExitUp to 80% as cash, at least 20% to an annuity. All of it below ₹8 L.
NPS Vatsalya exit rules. An annuity is a plan bought from an insurance company that pays a monthly pension. The table shows what can be taken as cash on exit, and how much of it is tax-free:
| Corpus at exit | Cash allowed | Annuity at least | Tax-free cash |
|---|---|---|---|
| ₹3,00,000 | All of it | ₹0 | ₹1,80,000 |
| ₹6,05,568 | All of it | ₹0 | ₹3,63,341 |
| ₹10,00,000 | ₹8,00,000 | ₹2,00,000 | ₹6,00,000 |
| ₹25,00,000 | ₹20,00,000 | ₹5,00,000 | ₹15,00,000 |
Example: Aarav at 18. His account has ₹6,05,568. That is below ₹8 L, so he may take all of it. If he moves it to normal NPS instead and adds nothing more, at 10% a year it would be worth this at 60.
- Corpus at 18
- ₹6,05,568
- Cash on full exit
- ₹6,05,568
- Left to grow until 60
- ₹3.32 Cr
No choice by 21? The account is moved to the high-equity scheme of the same pension fund under the Multiple Scheme Framework. From then on, the NPS Vatsalya options end and the normal NPS exit and withdrawal rules apply. Any withdrawal after that needs completed KYC. Read the adult rules on the National Pension System page, and see how a normal NPS account can grow with the NPS calculator.
NPS Vatsalya tax benefit
- ₹50KDeduction a yearOld regime, Section 124(4) (earlier 80CCD(1B))
- NoneNew tax regimeNo deduction for this contribution
- Tax-freePartial withdrawalUp to 25% of contributions
- 60%Of corpus tax-free at exitAs a lump sum
- On what you pay in: in the old tax regime, a parent or guardian can deduct up to ₹50,000 a year under Section 124(4) of the Income-tax Act, 2025 (earlier Section 80CCD(1B) of the 1961 Act). This is the same ₹50,000 limit as the extra deduction for your own NPS Tier I, so the two together cannot go above ₹50,000. It is over and above the ₹1.5 L limit of Section 123 (earlier 80C).
- New tax regime: no deduction is given for NPS Vatsalya payments.
- Partial withdrawal: up to 25% of contributions is tax-free in both regimes (Schedule III of the 2025 Act, earlier Section 10(12BA)).
- At exit: a lump sum of up to 60% of the corpus is tax-free (Schedule II of the 2025 Act). Any cash above that is added to the child's income for the year. The money used to buy an annuity is not taxed when it is used, but the pension from it is taxed as income.
- Death of the child: the amount paid to the guardian, nominee or heir is not treated as their income.
Example: Sunita's deduction (old regime). She pays ₹12,000 a year into Aarav's account. If she puts ₹30,000 in her own NPS, the whole ₹12,000 for Aarav also fits in the ₹50,000 limit. If her own NPS already uses ₹50,000, nothing more is left for Aarav's account.
- Paid for Aarav
- ₹12,000
- Deductible if own NPS is ₹30K
- ₹12,000
- Deductible if own NPS is ₹50K
- ₹0
NPS Vatsalya death of the child or the guardian
- Step 1If the child diesThe whole amount is paid to the guardian, nominee or legal heir. They can also move it to their own NPS account.
- Step 2If a guardian diesAnother guardian must be registered, with KYC documents.
- Step 3If both parents dieThe legal guardian can continue the account, with or without more payments. At 18, the child can continue or exit.
- Step 4NomineeThe parent or guardian is the nominee until 18. At 18, the child adds their own nominee.
NPS Vatsalya charges, statements and complaints
- Charges are the same as for a normal NPS account under the All Citizen Model: PoP, CRA, pension fund, NPS Trust and custodian fees.
- The Statement of Transactions is available online in the CRA login or app. Statements are also emailed, and a yearly statement is posted.
- Complaints can be filed on Pension Sahayak, PFRDA's grievance portal. The intermediary must reply within 30 days. If you are not satisfied, you can go to NPS Trust, the Ombudsman and then PFRDA. The NPS helpline is 1800 110 708.
NPS Vatsalya: strengths and limits
- Yes: Very low minimum of ₹250 a year, no upper limit
- Yes: Open to boys and girls, and to NRI and OCI children
- Yes: Regulated by PFRDA; the account is in the child's name
- Yes: Old regime deduction of up to ₹50K
- Yes: Can continue as a normal NPS account after 18
- No: Returns are market-linked, not fixed
- No: Partial withdrawal only for set reasons, after 3 years
- No: On exit, at least 20% must buy an annuity if the corpus is ₹8 L or more
- No: No deduction in the new tax regime
- No: Shares the ₹50K limit with the parent's own NPS
NPS Vatsalya vs Sukanya Samriddhi Yojana vs PPF
| NPS Vatsalya | Sukanya Samriddhi | PPF (minor account) | |
|---|---|---|---|
| For | Any child under 18 | A girl under 10 | Any minor child |
| Return | Market-linked | 8.2% now, fixed by government | 7.1% now, fixed by government |
| Yearly deposit | ₹250 to no limit | ₹250 to ₹1.5 L | ₹500 to ₹1.5 L |
| Money locked until | Age 18 to 21, partial use after 3 years | 21 years from opening | 15 years |
| Tax deduction | Old regime, Section 124(4), up to ₹50K | Old regime, Section 123 (80C) | Old regime, Section 123 (80C) |
| Tax at the end | 60% of corpus tax-free | Tax-free | Tax-free |
A child can hold NPS Vatsalya and Sukanya Samriddhi together. Read the full rules of the Sukanya Samriddhi Yojana and the Public Provident Fund.
Frequently asked questions
What is the NPS Vatsalya scheme?
NPS Vatsalya is a pension savings account for a child under 18, under the National Pension System. A parent or legal guardian opens and runs it in the child's name. The money is invested by a pension fund regulated by PFRDA. At 18, the child can keep it, move it to a normal NPS account or exit.
What is the minimum amount for NPS Vatsalya?
₹250 to open the account and ₹250 in each financial year. Later payments can be as small as ₹10. There is no upper limit. The minimum was ₹1,000 a year under the old rules, until 23 February 2026.
Who can open an NPS Vatsalya account?
A parent or legal guardian, for an Indian citizen child below 18, including NRI and OCI children. The parent does not need an NPS account of their own. A grandparent can open it only if they are the legal guardian, but grandparents, relatives and friends can all pay into it. Only 1 account is allowed per child.
What documents are needed for NPS Vatsalya?
Proof of the child's date of birth (birth certificate, school leaving or matriculation certificate, PAN or passport), the guardian's KYC (such as Aadhaar, passport, driving licence or voter ID) and the guardian's PAN or Form 60. NRI and OCI guardians also need the child's NRE or NRO bank account. A court-appointed guardian also gives a copy of the court order.
How can I open NPS Vatsalya online?
On the eNPS platform of NPS Trust, or on the website or app of a bank that is an NPS Point of Presence. Enter the guardian's and the child's details, complete KYC, choose a pension fund and a record-keeping agency (CRA), and pay the first contribution. A PRAN is issued in the child's name.
What are the NPS Vatsalya withdrawal rules?
After 3 years from opening, you can take out up to 25% of the contributions (not the returns) for the child's education, treatment of a specified illness or disability of more than 75%. This is allowed 2 times before 18 and 2 more times between 18 and 21.
What happens to NPS Vatsalya when the child turns 18?
The child must do fresh KYC and add a nominee. Then, until 21, the child can stay in NPS Vatsalya, move the whole amount to a normal NPS account, or exit. If no choice is made by 21, the account moves to a high-equity scheme of the same pension fund and the normal NPS exit rules apply.
Can the full NPS Vatsalya amount be withdrawn at 18?
Only if the corpus is below ₹8 L. If it is ₹8 L or more, up to 80% can be taken as cash and at least 20% must buy an annuity (a monthly pension).
What is the NPS Vatsalya tax benefit?
In the old tax regime, a parent or guardian can deduct up to ₹50,000 a year paid into NPS Vatsalya under Section 124(4) of the Income-tax Act, 2025 (earlier 80CCD(1B)). This is the same ₹50,000 limit as the extra deduction for your own NPS. The new tax regime gives no deduction for it.
What is the NPS Vatsalya interest rate?
There is no fixed interest rate. The money is invested in shares and bonds, so the return goes up and down with the markets and the pension fund's performance. Returns are not guaranteed.
Can a child have both NPS Vatsalya and Sukanya Samriddhi Yojana?
Yes. PFRDA says an NPS Vatsalya account can be opened whether or not the child has a Sukanya Samriddhi account, scholarships or other government benefits, subject to each scheme's own rules.
What happens to NPS Vatsalya if the child dies?
The whole amount in the account is paid to the guardian, nominee or legal heir. They can also choose to move it into their own NPS account. PFRDA says this amount is not treated as their income.