The National Pension System (NPS) is a unique pension plan backed by the Government of India, which provides both equity and debt exposure in single investment. It provides an attractive long-term saving alternative with a secure and regulated market-based return for correctly planning your retirement. The Pension Fund Regulatory and Development Authority (PFRDA) regulates it, and it provides a secure but transparent platform. When people reach retirement age, they get a lump sum payout as well as regular income, allowing them to live a stress-free retirement.
The National Pension Scheme is eligbile to all residents and state/central government employees, private employees and self-employed between aged 18 to 60.
Advantages to get Subscribed NPS
Additional Tax Saving – While annual contribution made to NPS Tier 1 accounts for ₹50,000 is eligible for an additional deduction in your taxable income under section 80CCD(1B): A savings of ₹15,600 in taxes, apart from existing deduction under section 80C for ₹1,50,000 ; A subsrciber can invest up to ₹2,00,000 in order to save ₹62,400 in taxes.
Cost-effective – A low-cost investment with a larger return. Although the initial investment may be little, the greater compounding aspect of these plans allows an individual to earn significant profits at retirement.
Disciplined Investment – Until you reach the age of 60, your investment is locked in and set-aside for your procurement of post-retirement funding. A minimum annual investment of Rs.1,000 is mandatory.
Better Alternative – These programmes provide better yields than other investments such as PPFs and FDs. Since the partial percentage of NPS invested in equities, it has potential to get better returns than other risky and fixed income products, on the other hand, it may not provide guaranteed returns.
Market Based Returns – Based on subsriber choice, NPS returns are dependent on the asset allocation amongst Equity (E), Corporate Bonds (C), Government Securities (G) and Alternate Investment Funds (A) and are directly linked to the market as per the market returns
Passive Income – Lifetime source of income Inflation is having a negative influence on every part of our life. So, in order to continue your previous lifestyle, you’ll need a steady source of money. NPS provides that choice in the form of a pension throughout the duration of your retirement, making it a lifesaver at a time when you most need financial assistance.
Professionally Manaaged – Your funds are invested and managed by the top pension fund managers in India and and ensures that you will receive guaranteed profits when you retire.
Withdrawal Option – NPS is a long-term investment plan which draws benefits based on compounding.There is a minimum lock in period of 10 years for All Citizens/Corporates. It’s time to retire. Withdraw up to 60% of your accumulated corpus as tax-free and invest the remainder for recurring income take advantage of a monthly pension.
Who should subscribe it?
- All tax paid Salaried people, Self employed and professionals across the age spectrum, would find us the best fit to give long-term financial security and intend to save an additional tax upto ₹15,600 p.a.
- Those who want low-cost, transparent & unbiased pension product who could take care on their rainy days.
- Those who are really serious about their post-retirement funding and want a monthly pension throughout the duration of your retirement, making it a lifesaver at a time when you most need financial assistance..
- Those who want proper control over their financial security and would want to ensure that they get passive income on monthly basis, instead of depending on their children. This results in clarity & peace of mind
- Those who want to get the financial freedom and financial independant.
Following is the Online Process to get newly subsribed NPS
- To start an individual pension account with the NPS, you must first register. An Indian citizen between the ages of 18 and 70 can open a ‘Tier I’ or ‘Tier I and Tier II both’ account using this option, however an NRI/OCI can only register a ‘Tier I’ account. Using this option, you must OTP Authenticate eSign your Subscriber Registration form. JOIN NPS
- To make a Subsequent Contribution to your Tier I or Tier II account under NPS, click Contribute.CONTRIBUTE This option is also available to Swavalamban account users who want to make a Subsequent
- CRA fees will apply to such transactions and will be deducted from the Subscriber’s NPS account separately as units. T+2 working days will be used for the investment (subject to receipt of clear funds from PGSP)
- Get Same Day NAV (D-Remit): is a service that allows you to register for a Virtual Account number and make smooth investments straight from your bank account. The Direct Remittance (D-Remit) technique can be used to invest in NPS on the same day (T+0) (as per pre-defined cut-off time for receipt of funds at Trustee Bank).
- For obtaining your Annual Transaction Statement for NPS transactions on your registered email ID, choose Annual Transaction Statement on Email.
We’re ready to help you with any questions you might still have?
Suresh Kumar Narula is founder and Principal Financial Planner at Prudent Financial Planners. He has earned the professional CERITIFIED FINANCIAL PLANNER and got registered with SEBI as Investment Advisor. He writes on personal and financial planning articles and got published in Dainik Bhaskar, Business Bhaskar and The Financial Planner’s Guild, India. He is also a member of Financial Planner’s Guild India ( An association of practicing SEBI registered Investment advisers) to create awareness about Financial Planning in general public, promote professional excellence and ensure high quality practice standards. Suresh received his an M.com from Himachal Pardesh University and an MFC from Punjab University, Chandigarh. He can be reached at info@prudentfp.in