Finance Minister Nirmala Sitharaman Launches NPS Vatsalya Scheme

Tags: Economy/Finance

Finance Minister Nirmala Sitharaman launched the NPS Vatsalya scheme in New Delhi, which was announced in the Union Budget 2024-25.

An Overview of the News

• The scheme provides children the benefit of high returns starting from the time savings are made.

• Since its inception, NPS has generated 9.5% CAGR returns for the government sector.

• For the non-government sector:

  • The equity asset class has delivered 14% CAGR returns.

  • Corporate debt has delivered a 9.1% CAGR.

  • Government securities have delivered 8.8% CAGR.

Unified Pension Scheme (UPS):

• The Unified Pension Scheme (UPS), recently approved by the Cabinet, will be effective from April 1, 2025.

• It combines the best aspects of the old and new pension schemes, ensuring an assured pension after retirement.

Key Features of NPS Vatsalya:

• Enables parents to invest in their children's future via a pension account.

• Ensures long-term wealth creation through the power of compounding.

• Offers flexible contributions and investment options with a minimum contribution of ₹1,000 annually.

• They were designed to be accessible to families across various economic backgrounds.