National Pension System is a retirement savings account of a person. It’s tax efficient at low cost. Here’s what you need to know about the National Pension System.
The National Pension System (NPS) is a pension scheme introduced by the Government of India. The government launched this scheme in January 2004 for government employees.
Employees can continue to invest a portion of their revenue in the pension scheme. After retirement, the subscriber will get a decent percentage of the total amount. Also, after the retirement, there is also an opportunity to earn a regular income from the balance sheet.
Any Indian citizen between 18 and 60 years old can join NPs. Customer (KYC) is the only condition that all standards should know. NRIs can also join NPs. But in case of change in citizenship, the account will be terminated.
By opening an NPS account with point-of-the-moment (POO) entities a person becomes a customer of the NPS. To open an NPS account, the Subscriber will have to produce the proof of completing the registration form, along with the proof of identity, address and date of birth. Each NPS subscriber will receive a card with a 12 digit number, Permanent Retirement Account Number or PAN.
The NPS has two accounts. Tier 1 and Tier 2 Accounts. Tier 1 is a compulsory account and an account with Tier 2 owned. The difference between them is the withdrawal of money invested through them.
Retired customers will not be able to withdraw money from Tier 1 account. But withdraw money from Tier 2. Tier 1 and Tier 2 can change the investment options once in the financial year.
An amount of Rs. 6,000 should be deposited with the Tier 1 account of the NPS. If the minimum amount is not deposited, the account will be frozen. You can visit POP and pay Rs. 100 fine and unfreeze your account.
The PFDA’s Registered Pension Funds are managed through NPS investments. ICICI Prudential Pension Fund, LIC Pension Fund, Kotak Mahindra Pension Fund, Reliance Capital Pension Fund, SBI Pension Fund, UI Retirement Solution Pension Fund, HDFC Pension Management Company, DSP Black Rock Pension Fund, etc. are funded by eight pension fund managers.