A PENSION SCHEME THAT COSTS LITTLE BUT DELEVERS MORE

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INVEST IN NATIONAL PENSION SYSTEM (NPS) SCHEME FOR A SECURE RETIREMENT

If you are looking for an easy access, flexible and portable retirement savings account, NPS or National Pension Scheme is the best bid for you. NPS is a low cost tax efficient (u/s 80CCC & 80CCD) savings instrument. NPS was launched by the Central Government of India. It is regulated by Pension Fund Regulatory and Development Authority (PFRDA). National Pension Scheme offers a robust and transparent platform to achieve their retirement goals cost effectively. Invest for retirement from an early age so that you can save enough to fulfill all your retirement wishes!

WHY SHOULD YOU BEGIN EARLY?

Beginning your retirement planning in the early stages will create a larger pension wealth and help you reach your retirement goals easily. Remember, an early start requires lesser investment to create a corpus of Rs. 1 crore Rupees.


Here's how you can achieve a Rs. 1cr. corpus by investing in NPS through regular monthly investments at different age levels.

Why Should You Begin Early?

The most common question that people ask is ‘How to invest for retirement at age 35’ or ‘How to invest for retirement at age 50’ while the right question to ask is ‘When to invest for retirement’ and the best answer is ‘Right NOW’, because the sooner you start the better you are able to plan your investments in order to retire rich.

The following example shows how an early start requires a lesser investment amount to create a corpus of Rs. 1 Crore.

If you start at Age 

Annual Contribution

48,000

Pension Wealth at Age 60 will be

 1,49,91,644

If you start at Age

Annual Contribution

48,000

Pension Wealth at Age 60 will be

 1,49,91,644

If you start at Age

Annual Contribution

48,000

Pension Wealth at Age 60 will be

 1,49,91,644

If you start at Age

Annual Contribution

48,000

Pension Wealth at Age 60 will be

 1,49,91,644

Note:

  • The calculations and the figures as displayed are indicative only excludes applicable charges.
  • Tax laws may change, affecting the Return On Investment (ROI).
  • Assuming 10% rate of return on NPS investment

KEY BENEFITS

PORTABLE ACCOUNT

The NPS account (PRAN) remains the same irrespective of change of employment or geography.

ONLINE PLATFORM

On joining NPS, each subscriber is provided with a Login ID and Password by the POP / CRA for accessing NPS details online

AVAILABILITY OF CHOICE

Choose your Service Providers, Funds, Investment Options, Pension Fund Managers, Annuity Service Provides and Annuity Plans as a NPS subscriber.

FLEXIBLE CONTRIBUTION MECHANISM

Amount and frequency of contribution can be changed as per the Subscriber requirement

FREEDOM TO SWITCH

Compared to other pension plans in India, NPS is one of the best in terms of flexibility as it allows you to switch your Service Provider, Fund, Investment Option and Pension Fund Manager

PRUDENTLY REGULATED

NPS is regulated by the PFRDA with transparent investment norms, regular monitoring and performance review of fund managers by the NPS Trust

GRIEVANCES MANAGEMENT

Subscriber grievances are efficiently managed through CRA/PFRDA Website, Call Center, Email or Postal Mail

TRANSPARENT INVESTMENT NORMS

Investment Portfolio under each asset class can be viewed on respective Pension Fund Manager’s website

LOW OPERATIONAL COST

With 0.01% as Fund Management Charge, NPS is one of the world’s least cost investment options

POWER OF COMPOUNDING

Till the retirement, pension wealth accumulation grows over the period of time with a compounding effect.

NPS VS PPF
ELIGIBILITY AGE
Between 18 - 65 Between 18 - No upper limit
MINIMUM AMT. TO INVEST P.A.
Minimum investment per year is Rs.1000. Minimum investment per year is Rs.500.
TAX BENEFIT
Tax Benefit up to Rs. 2,00,000 available per financial year.
Contributions up to Rs. 1,50,000 are exempted u/s 80CCD(1).
Additionally, contributions up to Rs.50,000 are exempted u/s 80CCD(1B).
Tax Benefit up to Rs. 1,50,000 available per financial year.
Contributions up to Rs. 1,50,000 are exempted u/s 80C.
CHOICE OF ASSETS / FUNDS
Can choose to divide investment into 3 types of funds namely - Equity, Corporate Bonds & Government Securities No choice. Everything is invested in Government Securities only.
AVAIL ANNUITY (PENSION) FACILITY
Yes No
LOAN FACILITY
No Yes
NRI’S CAN INVEST
Yes No
INVESTMENT MANAGEMENT CHARGES
0.01% p.a. 0%
PREMATURE WITHDRAWAL
Before Age 60: Up to 20% of Corpus can be withdrawn in lump sum Balance amount needs to be invested in Annuity
After Age 60: Up to 60% of Corpus can be withdrawn in lump sum Balance amount needs to be invested in Annuity
Can be made from the start of the 7th financial year
Complete withdrawal done only at maturity i.e. after 15 yrs.
REGULATED BY
Pension Fund Regulatory and Development Authority (PFRDA) Government of India
NPS VS ELSS
ELIGIBILITY AGE
Between 18 - 65 No minimum or maximum limit. Minor accounts can be opened.
MINIMUM AMT. TO INVEST P.A.
Minimum investment per year is Rs.1000. Minimum investment per year is Rs.500.
TAX BENEFIT
Tax Benefit up to Rs. 2,00,000 available per financial year.
Contributions up to Rs. 1,50,000 are exempted u/s 80CCD(1).
Additionally, contributions up to Rs. 50,000 are exempted u/s 80CCD (1B).
Tax Benefit up to Rs. 1,50,000 available per financial year.
Contributions up to Rs. 1,50,000 are exempted u/s 80C.
CHOICE OF ASSETS / FUNDS
Can choose to divide investment into 3 types of funds namely - Equity, Corporate Bonds & Government Securities No choice. Everything is invested in Equity only.
AVAIL ANNUITY (PENSION) FACILITY
Yes No
LOAN FACILITY
No No
NRI’S CAN INVEST
Yes Yes
INVESTMENT MANAGEMENT CHARGES
0.01% p.a. 1.90% to 3% p.a.
PREMATURE WITHDRAWAL
Before Age 60: Up to 20% of Corpus can be withdrawn in lump sum Balance amount needs to be invested in Annuity
After Age 60: Up to 60% of Corpus can be withdrawn in lump sum Balance amount needs to be invested in Annuity
Complete withdrawal done only at maturity i.e. after 3 yrs.
REGULATED BY
Pension Fund Regulatory and Development Authority (PFRDA) Securities and Exchange Board of India (SEBI)