For Parents and Guardians

Secure your child's future with NPS Vatsalya

Open an NPS Vatsalya account for your child today. Let compounding work across decades before they've even started earning.

Open Vatsalya Account

What is
NPS Vatsalya?

NPS Vatsalya is a savings scheme built specifically for children, giving parents and guardians a way to start planning for their child's future right from day one.

The sooner you start, the longer your money could grow through market-linked returns. Over time, even small, regular contributions can snowball into a substantial corpus, thanks to the power of compounding

At its core, NPS Vatsalya is more than just an investment scheme. It's a head start you give your child quietly, for a stronger, more secure future

The Vatsalya Journey

From the day you open the account to retirement a single,
uninterrupted thread.

01
PHASE 1 · BIRTH TO AGE 18

Parent opens the account,
DSP Pension manages it

The parent opens the NPS Vatsalya account in the child's name

  • Contribute regularly: The parent makes ongoing contributions to the account, starting with a minimum of ₹1,000 per year — allowing the corpus to build steadily over time. Family and friends can also contribute as gifts.
  • Utilize partial withdrawals, if needed: In case of specific contingencies, such as the child's education or treatment of specified illnesses the parent can make a partial withdrawal (up to 25% of contributions, excluding returns) after the account has completed 3 years, within the permitted limits before the child turns 18.
  • Tax benefits: Avail ₹50,000 tax deductions on the contributions made
Guardian holding newborn child
02
PHASE 2 · AT AGE 18

Three paths forward.
Child chooses.

On turning 18, the minor becomes the account holder with three paths forward.

  • Continue under NPS Vatsalya: The account can continue under the NPS Vatsalya framework for up to 3 more years (till age 21), allowing investments to keep growing.
  • Shift to NPS All Citizen Model: The account can be transitioned into a regular NPS Tier-I account under the All Citizen Model, giving the subscriber full independent control going forward.
  • Exit completely: The subscriber can choose to exit the scheme. Withdraw the entire corpus as a lump sum if the total accumulated amount is ₹8 lakh or less. If more, then withdraw up to 80% of the corpus as a lump sum, with the remaining 20% used to purchase an annuity
Young adult student walking on campus
03
PHASE 3 · BY AGE 21

Auto-converts to
DSP Pension MSF if no action taken

If the account holder does not make an active choice, the account automatically converts.

  • Seamless continuation: If the subscriber doesn't exercise any by age 21, the account automatically shifts to regular NPS Tier-I account under the All Citizen Model.
  • Default Investment Choice: System transitions the investment to high-risk, equity-oriented pension fund under the Multiple Schemes Framework of the selected PFM
Young professional walking through office entrance
04
PHASE 4 · AT AGE 60

NPS retirement
benefits apply.

At 60, the account holder can access retirement corpus under standard NPS rules.

  • Full withdrawal for smaller corpus: If the accumulated corpus is ₹8 lakh or less, the subscriber can withdraw the entire amount as a lump sum.
  • Lump sum with annuity: Withdraw up to 80% of the accumulated corpus as a lump sum, while the remaining 20% is used to purchase an annuity — ensuring a steady income stream continues even after exit.
  • Multiple exit choices: NPS now offers multiple options on exit depending on the subscriber
Retired individual receiving retirement celebration

Key Benefits

Compounding Power

Over 18 years, even modest annual returns snowball significantly, since each year's gains generate further gains on a growing base — turning patience into real, tangible growth.

Market-Linked Growth

Watch your money work harder every single year! Market-linked growth means your returns aren't fixed — they have the potential to soar with market cycles, giving your wealth room to truly flourish over time.

Flexible Contributions

Whether it's a steady monthly habit or an occasional boost, flexible contributions put you in the driver's seat. Add funds whenever you're ready — big or small, every contribution moves you closer to your goals.

Partial Withdrawals

Education. Health. Life's big moments. NPS Vatsalya lets you access up to 25% of your contributions when it counts. More flexibility and support, NPS Vatsalya's partial withdrawal rules are built for real life — not just retirement.

Tax Benefit up to ₹50,000

Deduction up to Rs. 50,000 available under Section 124(4) of Income Tax Act, 2025 under old tax regime where contributions are made by the assessee to the account of a minor as parent or guardian.

Seamless Transition at 18

At 18, the journey doesn't stop — it opens two paths! A quick KYC update smoothly transitions the account to retail NPS. Or, between 18 and 21, your child can choose to exit completely and withdraw the funds as per applicable rules.

What could ₹5,000 per month become in 18 years?

A parent who starts early gives their child something no exam can teach time in the market.

Open Vatsalya Account
Projected
Annual Return		 Corpus at End
of 18 Years		 Wealth Gained
(Corpus − Invested)
10% ₹30.36 L ≈ Rs 19.56 L
11% ₹33.87 L ≈ Rs 23.07 L
12% ₹38.27 L ≈ Rs 27.47 L

Why DSP?

  • 160+ years legacy

    DSP Group, established institution

  • Value Investing

    The timeless principle of investing

  • Invest for Good

    For the Life you've

Investment Strategy Overview

Creating long-term wealth through a diversified strategy that leverages equity growth.

  1. Growth-focused equity allocation for long-term wealth creation

    Since this is meant for a child's long-term future, the scheme leans more heavily into equities, about 50% to 75% of the portfolio. This gives the investment more room to grow and benefit from long-term market growth.

  2. Balanced allocation across debt

    Exposure to corporate debt instruments (0%–30%) is intended to enhance portfolio returns through accrual income while maintaining diversification and credit quality.

  3. Government securities for stability and returns

    Investments in government securities (15%–50%) provide stability, capital preservation, and help counterbalance equity market volatility.

  4. Liquidity, flexibility & suitability for moderately high risk investors

    To keep things flexible, about 10% of the portfolio is kept in money market instruments—this ensures there's enough liquidity on hand for short-term needs or to rebalance the portfolio when needed.

Start your child's
retirement journey today.

The account takes minutes to open but the impact lasts a lifetime.

Open Vatsalya Account

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Frequently Asked Questions on NPS Vatsalya account?

Here are some frequently asked questions about NPS Vatsalya account

Account Opening

NPS Vatsalya is open to all citizens of India who are under the age of eighteen years. The account will be opened and operated by the guardian on behalf of the minor.

Yes, NRI parents can open an NPS Vatsalya account for their minor children who are Indian citizens. Contributions are subject to FEMA and RBI regulations, and KYC norms applicable to NRIs must be fulfilled.

Yes, KYC is mandatory for both the guardian (parent) and the minor child at the time of account opening. Accepted documents include the child's birth certificate, Aadhaar, and the guardian's PAN and address proof.

Accumulation Stage

Funds in NPS Vatsalya are invested across asset classes — Equity (E), Corporate Bonds (C), Government Securities (G). Guardians can choose the fund manager, and the investments are done basis the scheme guidelines.

NPS Vatsalya offers market-linked returns,and it would depend on the asset allocation chosen.

Yes, contributions made under NPS Vatsalya are eligible for tax deduction under the provisions of the Income Tax Act, 1961, similar to NPS

The minimum contribution is Rs 250 per annum, with no upper limit on the maximum contribution.

The initial contribution required for enrolment under the scheme is Rs 250 only.

Exit Phase

After turning 18, the subscriber remains in NPS Vatsalya for up to 3 years (till 21), unless he/she chooses to exit or shift to NPS All Citizen Model or any other applicable model. Fresh KYC, including nominee details and any other stipulated details, is mandatory. Post KYC, the subscriber may choose to:

  • Seamlessly shift the entire corpus to NPS (All Citizen Model or other applicable model), OR
  • Withdraw up to 80% as a lump sum tax free and use the balance to purchase an annuity, OR
  • Withdraw 100% of the corpus if the total amount is less than ₹8 lakh.

If no option is chosen by age 21, the account automatically shifts to NPS in a higher-equity scheme under Multiple Schemes Framework under the same Pension Fund Manager.

A maximum amount of up to 25% of contributions (excluding returns) can be partially withdrawn.This facility can be availed after a minimum of 3 years from the date of account opening.It can be made maximum three times till subscriber attains 18 years of age.

The reasons/conditions for partial withdrawal include:

  • Education of the minor subscriber
  • Treatment of specified illnesses of the minor subscriber
  • Disability of more than 75% of the minor subscriber