The number stood at around 2.15 lakh at the end of March 2026, up from 1.07 lakh a year earlier.
The scheme allows parents or guardians to open an NPS account for a minor and make contributions towards long-term wealth creation. The minimum contribution is ₹250, with no upper limit. Relatives and friends can also contribute to the account as gifts.
Who is using NPS Vatsalya?
Data from Aditya Birla Sun Life Pension Fund shows that school-age children account for a large share of its NPS Vatsalya customers. Children aged 10–14 years make up 36.9% of its customer base, followed by those aged 5–9 years at 31.6%. Children aged 15–19 years account for 21.1%, while those aged 0–4 years make up 10.4%.
Together, children below 15 years account for 68.5% of the fund’s NPS Vatsalya customer base.
The pension fund said the data indicates that parents are starting long-term savings for children while they are still in school, rather than waiting until adulthood.
How does NPS Vatsalya work?
NPS Vatsalya is market-linked, and pension funds can offer different investment strategies.
According to SBI Pension Funds MD and CEO Pranay Ranjan Dwivedi, equity exposure in Vatsalya schemes can go up to 100%, depending on the scheme selected.
The account is designed for the long term, although partial withdrawals are allowed subject to conditions. SBI Pension Funds said that after three years, up to 25% of the contributions, excluding returns, can be withdrawn for specified needs such as education, medical treatment and certain disabilities.
The scheme also allows the account to continue beyond the child’s 18th birthday. According to SBI Pension Funds, the accumulated money can remain in Vatsalya up to age 21 or be shifted to the regular NPS framework, subject to applicable provisions.
This continuity is one of the features that distinguishes it from a conventional child savings product. “The opportunity in Vatsalya is not merely to create a corpus for the child. It is to give the child a 15–18 year head start in investing,” Dwivedi said.
NPS Vatsalya vs PPF or mutual funds
NPS Vatsalya does not necessarily replace other child-focused savings options. PPF is a government-backed, non-market-linked product, while mutual funds offer a wider range of investment choices and greater liquidity.
The choice therefore depends on the purpose of the money. Funds required for education or another goal within a defined period may need greater accessibility, while money that can remain invested for a much longer period can be considered for a long-term market-linked option such as NPS Vatsalya.
The scheme’s long horizon also means parents need to look beyond short-term market movements. As Dwivedi noted, “An investment horizon works only if the investment is allowed to remain long term.”
What is changing across NPS?
NPS is also seeing changes in how schemes are classified and presented. PFRDA’s new framework, issued in August 2026, standardises scheme categories and introduces clearer risk and asset-allocation classifications for applicable NPS schemes.
Ajay Kumar Yadav, CFPCM, Group CEO & CIO, Wise Finserv, said the changes are intended to make scheme comparison more structured, with information such as returns, benchmarks, charges, AUM and risk presented more systematically.
The framework, however, does not mean investors need to switch schemes simply because a new category or classification is introduced. The choice of scheme still needs to be linked to the investor’s retirement goal, time horizon, risk profile and asset allocation, according to Yadav.
Separately, Axis Pension Fund has highlighted technology-led onboarding, including a journey that it says can allow an NPS account to be opened in around 15–20 seconds. These developments are part of the broader push towards making NPS easier to access and understand, while NPS Vatsalya is extending the retirement-linked investment framework to younger investors.
