NPS
Overview
National Pension System (formerly known as National Pension Scheme) is an investment cum pension scheme initiated by Government of India to provide old age security and pension to all citizens of India. It is an investment tool that provides market –based returns. Since it offers exposure to both debt and equity instruments, NPS offers attractive returns over the long term. Other advantages of NPS include additional tax benefits and the option to invest, check scheme details and transfer funds online. Equitas Small Finance Bank has been appointed by PFRDA to act as one of the Points of Presence – Sub Entity (POP - SE) for NPS.
BENEFITS







FEATURES
A citizen of India can join the NPS subject to following conditions*:- Subscriber should be between 18 – 70 years of age as on the date of submission of her application.
- Subscriber should comply with the prescribed Know Your Customer (KYC) norms as detailed in the Subscriber Registration Form for NPS
* The above link is not available for Non-Resident Indians right now.
Two types of NPS Accounts available to Subscriber
Tier I Account
- Tier-I account is mandatory for opening NPS account.
- This is a restricted account and withdrawals are subject to meeting certain terms and conditions prescribed under NPS.
- Tax Benefits are associated with this account.
Tier II Account
- This is a voluntary savings facility available as an add-on to any Tier-1 account holder.
- Subscribers are free to withdraw their savings from this account.
- There are no tax benefits associated with the Tier-II account.
For All Citizen Model | Tier-I | Tier-II |
---|---|---|
Minimum Contribution at the time of account opening | Rs. 500 | Rs. 1000 |
Minimum amount per contribution | Rs. 500 | Rs.250 |
Minimum total contribution in the Year | Rs. 1000 | - |
Minimum frequency of contributions | 1 per year | - |
Investment Choices
NPS offers two investment approaches- Active Choice - A subscriber can actively decide as to how the funds are to be invested across asset classes and their percentages. Asset class Equity (E), Corporate Bonds (C) & Govt. Securities (G).
- Auto Choice - Subscriber has the choice of three life-cycle funds i.e. Aggressive Life cycle fund, (LC-75), Moderate Life cycle Fund (LC-50) and Conservative Life cycle Fund(LC-25). Investment is made from a life-cycle approach. Allocation is progressively decreased in Equity & increased in Bonds & Govt Securities.
How are the funds managed under NPS?
The funds contributed by subscribers are managed by PFRDA registered Pension Funds. At present, a subscriber has the option to select any one of the following seven pension funds:
- HDFC Pension Management Company Ltd
- ICICI Prudential Pension Fund
- LIC Pension Fund Ltd
- Kotak Mahindra Pension Fund
- SBI Pension Fund
- UTI Retirement Solutions Pension Fund
- Aditya Birla Sunlife Pension Management Limited
Fees & Disclaimer
Intermediary | Charge Head | Service Charge** | Frequency of deduction | Mode of deduction |
---|---|---|---|---|
POP (Service Provider) | Customer Registration | Rs. 400 | One time | Deducted upfront from the contribution amount |
Contribution Processing* | 0.50% | On each transaction | ||
Non – Financial Transaction Processing | Rs. 30 | |||
CRA (KARVY) | PRAN Opening Charges | Rs. 39.36 | One time | From NPS Account (by cancelling the units) on the last day of the calendar quarter |
Annual PRAN Maintenance cost per account | Rs. 57.63 | Per Annum | ||
Transaction Processing( Financial & Non-Financial) | Rs. 3.96 | On each transaction | ||
NPS Account Maintenance | Rs. 95 | Per annum | ||
Transaction Processing( Financial & Non-Financial) | Rs. 3.75 | On each transaction | ||
Fund Manager | Investment Management | 0.01% | annum | Through adjustment in NAV |
*Minimum Rs.30 and Maximum Rs.25,000 per contribution
** For more details visit www.npstrust.org.in/content/charges-under-nps. GST as applicable.
** For more details visit www.npstrust.org.in/content/charges-under-nps. GST as applicable.
Disclaimer:
NPS is launched & regulated by PFRDA - A GOI regulatory body . NPS is not a product/offering/recommendation / advise / solicitation by Equitas Small Finance Bank. Equitas Small Finance Bank acts only as a Point of Presence – Sub Entity registered with PFRDA to facilitate processing of NPS related services. NPS corpus may be invested in market related instruments as per guidelines of PFRDA . These instruments may carry market related and other risks and Equitas Small Finance Bank shall not be responsible for any losses/changes in fund value or NAV of the amount invested. Equitas Small Finance Bank doesn’t guarantee any returns. Equitas Small Finance Bank makes available NPS related services and doesn’t recommend choice of any scheme, allocation or fund manager, this being solely at customer discretion. Contribution payments are subject to PoP Service charges & applicable taxes, thus actual amount invested will be net of charges & taxes. Any application made by subscriber already registered is liable to be rejected. Third party payments are not allowed in Tier II contributions. Kindly refer pfrda.org.in to understand risks, CRA charges and other factors before investing. Past Performance May or May Not Be Sustained In The Future
NPS FAQs:
Click here for NPS FAQNPS Calculator
18
Rs.1000
5%
40%
4
Your Pension Account Summary at Retirement
Your Total Corpus at Retirement
4,50,0000
Your Total Contribution
2,50,0000
Withdrawal Amount at Retirement
2,00,0000
Annuity Value
2,00,0000
Your Expected Monthly Pension
40,0000
Disclaimer: The above calculation and illustration of figures are indicative only and not on actual basis.