Things to know about National Pension Scheme | Fusion - WeRIndia

Things to know about National Pension Scheme

Things to know about National Pension Scheme

The National Pension Scheme (NPS) is a retirement savings plan that ensures a monthly pension to investors of the scheme in their old age.

All central and state government employees, private sector employees and self-employed professionals can invest in the scheme. NPS is sponsored by the government of India. Any individual aged between 18-65 years can open an NPS account.

Both resident Indians and non-resident Indians can open it. However, the Reserve Bank of India (RBI) prescribed certain regulatory requirements to NPS accounts opened by NRIs. These accounts should also meet the requirements of the Foreign Exchange Management Act, 1999 (FEMA).

Here are some important things to know about NPS:

  • You can open an NPS account even if you have another pension plan. It can be opened irrespective of having a PPF or EPF account.
  • NPS account provides many benefits to investors. Portability is one of them. You can operate an NPS account from any location in the country.
  • You should not open multiple NPS accounts. In fact, there is no need to open multiple accounts as the account can be ported among various employers or sectors.
  • The minimum contribution to the NPS account is ₹500 at the time of opening in Tier I cities. Every time, you should contribute at least ₹500 to the account. The minimum total contribution is ₹1,000 per year. Also, you should contribute at least once a year.
  • If you are opening an NPS account in Tier II cities, you should open the account with ₹1,000, and the minimum contribution is ₹250 each time. There is no minimum total contribution in a year and minimum frequency of contribution in Tier II cities.
  • The Pension Fund Regulatory and Development Authority (PFRDA) regulates the NPS. You can open an NPS account online with banks like the State Bank of India (SBI) and at Finserv markets. For this, you need your KYC details, mobile number and email id.
  • If you finish the process as per instructions, you will be provided with your Permanent Retirement Account Number (PRAN).

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