Although this scheme was launched way back in 2009, but it has been gaining significance from the last couple of years. One can sign up for this scheme through various banks and other financial entities. As part of this scheme, you will be allotted a permanent retirement account number (PRAN), which will be a unique number valid across the nation.
NPS offers two types of accounts: Tier I and Tier II. Tier I account is for those who choose to contribute their savings, including the contribution from their employer, for retirement into a non-withdrawable account. Tier II account, on the other hand, is a voluntary savings account as per which the contributors are free to withdraw their money anytime they want.
2. Subscribers, to contribute in Tier I and Tier II accounts, are required to make their first contribution at the time of registration with minimum contribution of Rs.500 for Tier I and Rs.1000 for Tier II at any POP-SP with an NCIS form
3. NPS has two approaches to invest money in your account - Active choice and Auto choice
A. In the Active choice option, you will have the option of deciding how your NPS money is invested in three assets classes E, C and G. in this choice, you will have the option of choosing your fund manager and provide the ratio in which your funds have to be invested among the above mentioned asset classes.
B. In the Auto choice option, your money will be invested in various asset classes in a lifecycle fund according to a pre-defined portfolio. In Auto Choice, the proportion of E, C and G is determined by the contributor’s age. At every birthday of the contributor, these proportions are readjusted as stated in the life-cycle matrix.
4. In case you withdraw your NPS deposits before 60 years of age, you’ll get only the 20% of the total amount while the remaining amount will be used to purchase an annuity. However, if you withdraw your money after the age of 60, you can get 60% amount in a lump sum while the rest 40% will be saved to buy an annuity. In case of death, your 100% of the amount will be available to the nominee or legal heir of the subscriber.
The government’s idea behind the new pension scheme is to make every retiree independent and self-willed. Those who want to make their retirement the awe-inspiring and amazing days of their life can start investing in the NPS scheme. Since it’s a government initiative, there is a sure shot guarantee of receiving the withdrawal amount when you need it the most. The eligibility criteria to apply for the New Pension Scheme include:-
1. You must be a citizen of India.
2. You must make at least one contribution in a year to keep the scheme active.
3. You must be at least 18 years of age to contribute in the NPS.
NPS offers two types of accounts: Tier I and Tier II. Tier I account is for those who choose to contribute their savings, including the contribution from their employer, for retirement into a non-withdrawable account. Tier II account, on the other hand, is a voluntary savings account as per which the contributors are free to withdraw their money anytime they want.
5 features of the New Pension Scheme (NPS)
1. The New Pension Scheme is valid for every individual aged between 18 to 60 years of age2. Subscribers, to contribute in Tier I and Tier II accounts, are required to make their first contribution at the time of registration with minimum contribution of Rs.500 for Tier I and Rs.1000 for Tier II at any POP-SP with an NCIS form
3. NPS has two approaches to invest money in your account - Active choice and Auto choice
A. In the Active choice option, you will have the option of deciding how your NPS money is invested in three assets classes E, C and G. in this choice, you will have the option of choosing your fund manager and provide the ratio in which your funds have to be invested among the above mentioned asset classes.
B. In the Auto choice option, your money will be invested in various asset classes in a lifecycle fund according to a pre-defined portfolio. In Auto Choice, the proportion of E, C and G is determined by the contributor’s age. At every birthday of the contributor, these proportions are readjusted as stated in the life-cycle matrix.
4. In case you withdraw your NPS deposits before 60 years of age, you’ll get only the 20% of the total amount while the remaining amount will be used to purchase an annuity. However, if you withdraw your money after the age of 60, you can get 60% amount in a lump sum while the rest 40% will be saved to buy an annuity. In case of death, your 100% of the amount will be available to the nominee or legal heir of the subscriber.
The government’s idea behind the new pension scheme is to make every retiree independent and self-willed. Those who want to make their retirement the awe-inspiring and amazing days of their life can start investing in the NPS scheme. Since it’s a government initiative, there is a sure shot guarantee of receiving the withdrawal amount when you need it the most. The eligibility criteria to apply for the New Pension Scheme include:-
1. You must be a citizen of India.
2. You must make at least one contribution in a year to keep the scheme active.
3. You must be at least 18 years of age to contribute in the NPS.
4. The maximum age to sign up for NPS is 60 years.
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