National Pension System: A Guide On Retirement Planning
Here you can get full information about NPS Scheme(Like who can invest, percentage return, withdrawal process).
National Pension System (NPS Scheme) is a ‘Retirement Savings Scheme’ which anyone can use to build retirement corpus. NPS Scheme can not generate income after retirement.
National Pension Scheme is a government-sponsored pension scheme. It was launched in January 2004 for government employees. However, in 2009, it was opened to all sections. The scheme allows subscribers to contribute regularly in a pension account during their working life.
Focus Points About National Pension System (NPS Scheme)
- A Scheme which secure your Retirement : NPS is more of a savings scheme than an investment option. NPS money is also invested in equity, debt & government bonds. Return from NPS is much higher than other pension plans like (PPF, EPF, Gratuity etc).
- Planned way of Savings: Subscribers can also use NPS to save systematically. Instead of saving their money in bank, fixed deposit, PPF etc, retirement linked money can save in NPS. Why NPS? Because it can generate higher returns due to equity sharing.
- Optional & Defined: The contribution made to NPS are optional and defined. It means, one can voluntarily opt to contribute to NPS. Moreover, the size and frequency of contribution is also define by the subscribers themselves.
- A Proper after Retirement Income: A key characteristic of a good retirement income is that, it should be ‘guaranteed’. The corpus built through NPS canalso be use to buy annuity, which generates assured income.
Frequently Asked Questions –
- Who can make investments with the National Pension System?
Any Indian citizen between the age group of 18 and 60 complying with the KYC requirements and qualifying for either of the NPS models can invest with the system.
- Is saving with the National Pension System allowed for an NRI?
Yes, an NRI can opt for the National Pension Scheme for retirement corpus creation provided he/she maintains the residential status until exit from the scheme.
- How would I know if my bank serves as a PoP for the scheme or not?
You can check the list of authorised PoPs at NPS’s official website to confirm whether your bank serves as a PoP or not.
- Can an individual invest in more than one National Pension Scheme?
No, the scheme comes with a unique PRAN for each individual and thus does not allow multiple accounts for a single person.