NPS Vatsalya HDFC

Key Features of HDFC NPS Vatsalya

Below are the key features of NPS Vatsalya HDFC 

• The minor is the sole beneficiary of the account. Parents or guardians manage the account and contributions until the child turns 18.

• The account is seamlessly converted into a regular NPS Tier 1 account once the minor attains 18 years, with the child taking full control.

• No maximum contribution limit; the minimum contribution is ₹1,000 at the time of account opening and per year.

• Freedom to choose the preferred fund manager and asset allocation for the investment.

• Offers the power of compounding, as early investments have a significant positive effect on the corpus over the long term.

Eligibility Criteria for NPS Vatsalya HDFC

• Indian citizens (including NRIs and OCIs) below 18 years are eligible for account opening.

• Only parents or legal guardians can operate the Vatsalya account until the beneficiary turns 18.

• The account automatically converts to a regular NPS account at the age of majority.

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Benefits of NPS Vatsalya HDFC

Following are the benefits of NPS Vatsalya HDFC: 

• Early Financial Discipline: Builds investment and savings discipline from a young age.

• Long-Term Security: Offers financial security for children through long-term pension planning.

• Tax Benefits: As per the latest announcements, contributions are eligible for deductions under Section 80C (up to ₹1.5 lakh) and Section 80CCD(1B) (up to ₹50,000) from FY 2025-26 onwards.

• Partial Withdrawals: Up to 25% of the contributions (after three years) can be withdrawn for critical needs like education or medical emergencies, subject to specified conditions.

• Protection Against Uncertainty: Provides a safety net for the child’s education, marriage, and other milestones.

• Seamless Transition: Once 18, the child can manage or withdraw corpus as per general NPS norms.

How to Open an NPS Vatsalya Account HDFC

Below are the steps are to how you can open NPS Vatsalya HDFC account: 

• Visit the HDFC NPS portal or eNPS website.

• Select ‘NPS Vatsalya (Minors)’ and the desired Central Recordkeeping Agency (CRA).

• Provide the guardian’s details and minor’s information; complete KYC as required.

• Make the minimum first contribution (₹1,000).

Exit and Withdrawal Rules of NPS Vatsalya HDFC

Below are the exist and withdrawal rules of NPS Vatsalya HDFC: 

• Upon turning 18:

  • If the accumulated corpus is at least ₹2.5 lakh, a minimum of 80% must be annuitized, and a maximum of 20% can be withdrawn as a lump sum.

  • If the corpus is less than ₹2.5 lakh, up to 100% withdrawal is allowed.

• If the minor passes away, the entire NPS corpus returns to the guardian.