Find your suitable insurance plan
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5 min read
Updated on Mar 14, 2023
The National Pension Plan allows Indian citizens the option to invest in a long-term savings plan for their retirement by investing in the regulated markets. The best thing about NPS is that it can be availed by any citizen of India including NRIs and OCIs between the age of 18 to 70 years.
Interestingly, NPS has received wide acceptance by citizens across government and non-government sectors who are contributing crores of rupees to the scheme. Let’s discuss some details of the plan here.
NPS or National Pension Scheme is an easy to access scheme that is affordable and tax-efficient at the same time. The pension plan is introduced for people as a retirement saving scheme to benefit them in their old age. Salaried individuals can contribute to NPS to secure their retirement, while a co-contribution comes from their employer.
The NPS account functions on the basis of defined contribution where account holders contribute to their accounts. However, no defined benefits are estimated in advance which the subscriber will receive at the time of plan exit. The corpus that is accumulated depends on the contributions made and income gained from the scheme. Depending on your contribution amount you receive the benefits. The more the contribution the better the wealth.
Unlike other pension schemes, NPS allow Indian citizens including NRIs to subscribe to the scheme. As far as the entry age is concerned, 18 to 60 years is the duration during which you can join an NPS scheme.
You can apply for an NPS account through the online platform of eNPS. Here are the steps to register for this scheme:
For the offline process of opening an NPS account, the interested individuals need to find a PoP (Point of Presence) such as a bank. The individual has to collect a subscriber form from the nearest PoP and submit your KYC documents together.
Now, pay your initial contribution of INR 500, your PRAN number will be issued. You can pay INR 250 per month or INR 1,000 per year as a minimum contribution.
You will receive a sealed welcome package with your account number and password with which you can manage your account. You may have to pay a one-time registration fee of INR 125 for this method.
To Sum Up
An NPS account can be opened by any Indian citizen between the age of 18 to 70 years. An individual can make a lump sum contribution of INR 1,000 as a maximum limit of contribution in NPS to open an account or can pay per month instalments.
For any query on NPS, you can try the NPS helpline to solve issues and to confirm if the NPS scheme is beneficial for you as an investment and regarding the enrolment process. You can reach out to the national pension scheme helpline at 022-2499 3499 for your queries.
Further, you can use an NPS scheme calculator to calculate a rough estimate of benefits you can receive from your NPS account at maturity or to get clarity about your premium payment.
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NPS stands for National Pension System.
Yes, NPS scheme India is one such pension policy that allows NRIs to join the scheme. The plan is simple to acquire as there is hardly any paperwork that an NRI needs to produce additionally. However, if there is a change in your citizenship status, your NPS account may get closed.
There are various government and private banks that are best for NPS. For instance, the 5-year term HDFC pension fund with 17.14% return is one of the best NPS schemes that you can opt for. Although, there are many other choices available as well including the NPS scheme in post offices.
Here are some NPS benefits:
Policyholders of NPS (salaried people) can claim tax deduction on the NPS investment of up to 10% of salary, which include basic plus dearness allowance
Policyholders of NPS (self-employed) can avail tax deduction of up to 20% on their gross income. For tax exemption, the NPS Maximum limit is INR 1,50,000.
NPS is a pension cum investment scheme offered by the government of India available with a long-term saving avenue to support retirement plans of individuals through planned and market-based returns.
PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
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