What is the minimum annual contribution (in Rs.) required to open and maintain an NPS Vatsalya account launched in September 2024?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2: 1,000.
Explanation:
- Under the NPS Vatsalya scheme, launched by the Government of India in September 2024, the minimum annual contribution required to open and maintain an active account is ₹1,000.
- Launch of the Scheme: This scheme was formally inaugurated by the Union Finance Minister, Nirmala Sitharaman, on September 18, 2024.
- Objective: This scheme is designed specifically for minors (individuals under the age of 18) to enable parents to save for their children's future over the long term and ensure the security of a 'pension'.
- Minimum Contribution: A minimum contribution of ₹1,000 is required to open the account. Subsequently, it is mandatory to deposit a minimum of ₹1,000 annually to keep the account active.
- Account Conversion: Once the child attains the age of 18, this account is converted into a standard NPS (Tier-I) account.
Key Features of NPS Vatsalya (Quick Revision):
- Eligibility: All Indian citizens under the age of 18.
- Administration: It is regulated by the PFRDA (Pension Fund Regulatory and Development Authority).
- Investment Options: Parents can choose from various Pension Fund Managers and asset allocation options (Equity, Corporate Debt, Government Securities).
- Withdrawals: Partial withdrawals are permitted during the tenure of the account for specific needs, such as education or medical expenses.
Important Questions for Upcoming Examinations:
Question: For which age group has the NPS Vatsalya scheme been launched?
Answer: For minors under the age of 18.
Question: Who is the regulator of the pension sector in India?
Answer: PFRDA (Pension Fund Regulatory and Development Authority). Question: When is an NPS Vatsalya account converted into a regular NPS account?
Answer: Upon the beneficiary attaining the age of 18 years.