The National Pension System likewise, known as the NPS is intentional; retirement reserve funds that help intend to promise investment funds during a person’s working life.
Whoever wants to enter the NPS plan they can visit a reputed bank with identity proof, address verification and age confirmation, and fill up the required information? Most banks encourage the NPS account opening for senior citizens’ benefits in India.
What is the National Pension System (NPS)?
National Pension System (NPS) is a government-supported pension scheme. Launched in January 2004 it was meant for government employees. However, in 2009 it was meant for everyone. This scheme allows people to contribute money regularly during their entire lifetime. Once they retire the subscribers can withdraw a part of the corpus and use the remaining corpus to purchase an annuity to ensure a regular income after retirement.
Who can join NPS?
Any Indian citizen between the age group of 18 and 60 years can join the scheme. However, the person must adhere to the customer (KYC) norms.
What about NRI’s? Can they join Non-Resident Indian (NRI)?
Yes, an NRI can join NPS. However, the change in the citizenship status of the person may close the account down.
How do I join NPS?
Open an NPS account with entities known such as Point of Presence (POP). Both the private and public sectors come under the POPs paradigm. Some financial institutions operate as POPs. The point of presence service providers or the authorized branches of a POP (POP-SPs), act as the collection points.
How to find POPs near me?
Visit the website, the Pension Fund Regulatory, and Development Authority (PFRDA) and click on this link to open an account, https://www.npscra.nsdl.co.in/pop-sp.php
The Documents Required for Opening the NPS account?
First, fill up the subscriber registration form and fill in with other details such as proof of identity, address, and date of birth submit the same to the POP.
What is a Permanent Retirement Account Number (PRAN)?
Every NPS subscriber is issued a PRAN number or a 12-digit unique number called Permanent Retirement Account Number or PRAN.
What is the Significance of Tier-I and Tier-II accounts of NPS?
NPS offers two accounts: Tier-I and Tier-II accounts. The mandatory account is Tier-I and Tier-II is voluntary. The one difference between the two is the withdrawal of money that is invested. You cannot withdraw the entire money from the Tier-I account till your retire. Even if you retire there are several restrictions on withdrawal of the Tier-I account. The subscriber can withdraw the entire amount from the Tier-II account.
What is the minimum amount of money you can contribute to NPS?
The minimum amount of contribution is Rs 6,000 in your Tier-I account in a given financial year.
Are investment Choices Available for NPS?
When it comes to NPS there are two choices:
- Active Choice: This option helps the investor to determine and divide the money on different assets.
- Auto choice or a lifecycle fund: This is a default option and invests money as per the age of the subscriber.
When can I withdraw money from NPS?
You have to invest till retirement since it is a pension account. At 60, you can buy an annuity income by using 40 percent of the corpus from an insurance company,( PFRDA-listed). You will enjoy the tax-free benefits as you withdraw 40 percent of the corpus tax-free. The remaining 20 percent of the corpus will be applicable as per the income tax slab or you can buy an annuity for it.
The documents you need to submit along with withdrawal forms?
- PRAN card (original)
- Document for proof of identity (attested copy)
- Address proof (attested copy)
- A canceled cheque
How to make commitments to the NPS through NSDL (National Securities Depository Limited)?
If you are a subscriber of the NPS scheme, you can approach any branch of a reputed bank or visit the eNPS website (https://enps.nsdl.com) for making significant contributions to your NPS Tier I account.