National Pension System - An Introduction

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For retirement planning, one of the best and safe options is to invest in National Pension System. It provides reasonable market returns and is a good choice for securing your hard-earned money for later years of your life. NPS is based on unique Permanent Retirement Account Number (PRAN) and is allotted to every subscriber to NPS.

Who Can Open An NPS Account?
Any citizen of India between the ages of 18 years to 65 years can open an NPS account. The applicant needs to be KYC compliant and should have an existing NPS account. You need to have an active mobile number, email ID and bank account.

What are the Different Types of NPS accounts?

Tier I:
Contributions made in this account are eligible for additional tax benefit of up to Rs. 50000/- under Section 80CCD. This is in addition to the standard deduction available under Section 80C of Rs. 150000/-.

Tier II:
One can also choose to invest additional amount in Tier II of NPA account. The benefit of this investment is that one is free to withdraw the sum at any time. No tax benefits are available in this account.

national pension system


What is the Minimum Contribution Required?
Contributions
Tier I
Tier II
Minimum contribution at the time of account opening
Rs. 500/-
Rs. 1000/-
Minimum subsequent contribution
Rs. 500/-
Rs. 250/-
Minimum contribution per year
Rs. 1000/-
NIL
Minimum number of contributions in a year
1
NIL

What are the Benefits of NPA?
  • Voluntary Scheme
You can contribute at any point of time in a Financial Year.
  • Flexibility
NPS is a flexible system where you can choose your own investment options and pension fund.
  • Portability
Subscribers can operate their account from anywhere in India via vast networks of Point of Presence (POPs). POPs are appointed as first point of contact for NPS subscribers.
  • Safe Investment
It is a safe retirement fund introduced by Government of India. NPS is regulated by Pension Fund Regulatory and Development Authority.

Who are Pension Fund Managers?
PFDRA has appointed Pension Fund Managers to manage/invest and administer the fund collected from NPS subscribers. PFM are:
  • SBI Pension Funds Private Limited
  • LIC Pension Fund Limited
  • HDFC Pension Management Company Limited
  • UTI Retirement Solutions Limited
  • ICICI Pension Fund Management Company Limited
  • Kotak Mahindra Pension Fund Limited
  • Birla Sunlife Pension Management Limited
  • Reliance Capital Pension Fund Limited
I know you have plenty of questions going in your mind. Not to worry! Feel free to ask your queries in the comments section below.

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