National Pension Scheme (NPS) is an initiative taken by the central government. Is it an easily accessible, low cost, tax-efficient, flexible, and portable retirement savings account. These schemes encourage you to invest regularly for your retirement account at an early age when you are employed or working. Under National Pension Scheme (NPS), the individual contributes to his retirement account and his employer can also co-contribute to their fund for the social security and the welfare of the individual so that he can get motivated and invest regularly and get the good amount at the time of retirement. You can avail of the tax exemption under section 80C and 80CCD.
You can join National Pension Scheme (NPS) even any citizen of India, whether resident or non-resident of India, subject to the following conditions given below can join NPS :
- Individuals who want to join this scheme should be aged between 18-65 years as on the date of submission of application for NPS.
- The citizens can join NPS either individuals or as an employee-employer group(s) (corporates) subject to the submission of all required information and Know Your Customer (KYC) documentation.
- After attaining 65 years of age, you will not be permitted to make further contributions to the National Pension Scheme accounts.
Management of Funds under NPS
The funds contributed by the subscribers are invested by Pension Fund Managers (PFM’s). The investment is made in a judicious mix of investment instruments like Government securities, corporate bonds, and equities. Some of the Pension Fund Managers (PFM’s) who manage the subscriber funds are:
- ICICI Prudential Pension Fund
- LIC Pension Fund
- Kotak Mahindra Pension Fund
- Reliance Capital Pension Fund
- SBI Pension Fund
- UTI Retirement Solutions Pension Fund
- HDFC Pension Management Company
- DSP Blackrock Pension Fund Managers
Prominent Features of NPS
The retirement account under NPS has some features which are as follows :
- Every individual subscriber who taken a National Pension Scheme is issued a Permanent Retirement Account Number (PRAN) card which has a 12 digit unique number. In case your NPS card being lost or stolen then you do not have to worry you can get the same reprinted but you have to pay additional charges.
- Under the National Pension Scheme account, there are two sub-accounts named Tier I & Tier II. Tier I account is mandatory and subscriber has the option to opt for Tier II account opening and operation
The following are the salient feature of these sub-accounts :
- Tier I account: This Tier I account is a non-withdrawable retirement account. If you want to make withdraw you can do so by only upon meeting the exit conditions prescribed under NPS.
- Tier-II account: This is a voluntary savings facility available as an add-on to any Tier-I account holder. Whenever the subscribers wish to withdraw their savings from this account will be free to do so.
HOW TO OPEN NPS ACCOUNT
There are both the option are available to open NPS account which is online as well as offline mode :
You have an option to open your NPS account through offline mode for this you just have to reach your bank get an NPS opening form and fill the form and give your KYC details to the bank to get KYC done. And after filling your form you have to make the initial investment which should be not less than Rs. 500 or Rs. 250 monthly or Rs. 1,000 annually, then after this process complete you will get a Permanent Retirement Account Number (PRAN). A welcome kit is sent to you in which you can find get your PRAN number and password for the NPS account. There is a one-time registration fee of Rs. 125 you have to pay for this process. And your account is opened and you are ready for your investment.
To get the NPS account opening process easy the online mode is here to help us. To open an account you have to visit the enps.nsdl.com website, you have to link your account to your PAN, AADHAAR and/or mobile number so that you can validate the registration using the OTP (one time password) sent to your mobile number. Then after this will generate a Permanent Retirement Account Number (PRAN) which you can use for login in the NPSportal.
You have to get an NPS in your portfolio as it is easy to operate, provides you the secured return, provides tax benefits, and on the top, it is a government investment that means it is a risk-free investment.