National Pension Scheme is a defined contribution pension scheme introduced by the Government of India. The scheme was launched on 1st January 2004 and is open to all citizens of India between the ages of 18 and 60.
The scheme offers a minimum guaranteed return of 9% – 12% p.a. and also provides income tax benefits similar to fixed deposit schemes such as 10 Lakh FD. The scheme has two investment options – government securities and equity mutual funds. The scheme is mandatory for all central government employees.
For other employees, it is voluntary. The scheme has been extended to all citizens of India from 1st May 2009. The scheme has a minimum contribution of Rs. 1000 p.a. and a maximum contribution of Rs. 1,50,000 p.a. The scheme has a lock-in period of 5 years. In National Pension Scheme, partial withdrawals are allowed for certain purposes such as higher education, marriage, and health emergencies. A scheme is a good option for long-term investment and retirement savings. It is a safe and secure investment option with guaranteed returns.
Steps to open an NPS account online
Opening an account in National Pension Scheme online in India is easy. All you need is a PAN card, a bank account, and an email id. The process is as follows:
- Visit the official website of the National Pension Scheme. Click on the ‘Register’ button on the top right corner of the homepage.
- A new page will open. Enter your personal details like name, date of birth, gender, etc.
- Create a username and password.
- Enter your PAN number and bank account details.
- Choose the scheme in which you want to invest.
- Enter the amount you want to invest.
- Review all the details and click on the ‘Submit’ button.
- You will receive a confirmation email on your registered email id.
- Login to your account using the username and password.
- Complete the KYC process by submitting the required documents.
- Your account will be activated, and you can start investing.
Benefits of Investing in the National Pension Scheme
NPS helps in building a retirement corpus: NPS helps in building a retirement corpus by providing regular income after retirement. NPS also provides tax benefits on the contributions made towards the scheme.
NPS is a flexible pension scheme: NPS is a flexible pension scheme that allows subscribers to choose the investment option and the amount of contribution. The subscribers can also change the investment option and contribution amount at any time.
NPS offers portfolio diversification: NPS offers portfolio diversification by investing in various asset classes such as equity, debt, and government securities. This helps in reducing the risk and maximizing the returns.
NPS provides safety of investment: NPS provides safety of investment as the subscribers’ money is invested in government securities which the government backs.
NPS offers transparency: NPS offers transparency in the investment and the charges levied by the fund managers. In addition, subscribers can view their account statements and transactions online.
NPS offers liquidity: NPS offers liquidity to subscribers, who can withdraw up to 20% of their accumulated corpus before retirement.
NPS is a portable pension scheme: NPS is a portable pension scheme that can be transferred from one employer to another.
NPS is a voluntary pension scheme: NPS is a voluntary pension scheme which means subscribers can join and leave the scheme at any time.
NPS offers tax benefits: NPS offers tax benefits on the contributions made towards the scheme. In addition, the withdrawals at the time of retirement are also tax-free.
NPS offers Flexibility: A major benefit of the NPS scheme for the investors is that they are given the option to change the fund manager if they are dissatisfied with the performance of the fund they invest in.
The National Pension Scheme (NPS) is a retirement pension plan that enables individuals to receive a regular income after retirement with post-retirement tax advantages in the form of pensions. In addition, if you are looking for a pension plan that offers the widest range of benefits, you may be able to significantly increase your earnings by taking a small amount of voluntary risk.
Furthermore, maintaining investment portfolios has become much easier for people due to the advancement of technology. Once you have opened an account with the NPS, it will be feasible for you to make your payments online by using the national pension scheme’s official web portals or the mobile app.