v Account – Benefits, uses and how to apply online
For those who are new to pension schemes provided by the Government of India, this one’s for you. This guide will help you get an insight into the NPS account and how it benefits the citizens of India.
Table of contents
- What is an NPS account?
- Who can join the NPS account?
- What are the benefits of the NPS account?
- What is the use of an NPS scheme?
- How does NPS work?
- What are the different types of NPS accounts?
- What are the investment types available in the NPS scheme?
- How to open an NPS account?
What is an NPS account?
NPS or the National Pension System is a government-initiated pension scheme, wherein all sections of the society can open a pension account. The program allows the subscriber to contribute every month during their working life until they attain 60 yrs of age. On retirement, the subscriber can withdraw a part of the corpus as a lump sum and use the remaining corpus to buy an annuity to secure a regular income after retirement. The entire corpus of the NPS scheme is tax-free as well as the total pension withdrawal amount is also tax-free. Don't use plagiarised sources.Get your custom essay just from $11/page
Who can join the NPS account?
NPS was launched in 2004 January for government employees, but in 2009, it was open to all sections of the society. Under the NPS scheme, any Indian citizen between 18 and 60 years can join NPS with valid KYC documents.
What are the benefits of the NPS account?
- The whole process of NPS is voluntary. A subscriber can contribute at any age after 18yrs and also has the freedom to change the amount he wants to set aside and save every year
- NPS account processing and managing are simple. Subscriber is required to open an account with any one of the POPs or through the eNPS website.
- There is no specified amount that you need to contribute. The subscriber can choose their own investment options and pension fund
- Easy accessibility is what sets the NPS account more customer-friendly. A subscriber can operate his/her account from anywhere, even if they get a job transfer or shift to a different location.
- The money invested in NPS is regulated by PFRDA, whose investment norms are transparent. Also, a subscriber can easily monitor the performance of fund managers by NPS trust.
What is the use of an NPS account?
NPS account helps a subscriber to get a monthly pension after their retirement, thereby providing social security and financial inclusion.
How does NPS work?
NPS is a kind of investment-cum pension scheme where the contributions are invested in a mix of assets. The retirement corpus is determined based on the returns from those assets. The functioning is carried out by dedicated pension fund managers to secure the investor’s money.
What are the different types of NPS accounts?
Tier-l and Tier-ll are the two different types of the NPS account. Tier-l is a mandatory account where you cannot withdraw the entire money from Tier-l until your retirement. Withdrawal of funds invested in Tier-ll is possible.
How to open an NPS account?
You can open online by logging on to the NPS official website. While registering to choose ‘individual’ and enter the details as required, start with Tier-l account, and then if you are investing for other goals, then select Tier-ll.
Keywords used: NPS account.