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.

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If you start at Age 25
Annual Contribution Rs. 48,000
Pension Wealth at Age 60 will be

Rs.1,49,91,644

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If you start at Age 30
Annual Contribution Rs. 78,000
Pension Wealth at Age 60 will be

Rs.1,45,58,012

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If you start at Age 35
Annual Contribution Rs.144,000
Pension Wealth at Age 60 will be

Rs.1,58,31,280

If you start at Age 40
Annual Contribution Rs.192,000
Pension Wealth at Age 60 will be

Rs.1,21,21,076

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

Benefits of NPS

Portable Account

The NPS account (PRAN) remains the same irrespective of a change in 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

You can choose your Service Providers, Funds, Investment Options, Pension Fund Manages, Annuity Service Provides and Annuity Plans as a NPS subscriber

Freedom to Switch

You can switch your Service Provider, Fund, Investment Option and Pension Fund Manager if you choose to invest in pension plans in India through NPS

Flexible Contribution Mechanism

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

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.

National Pension Scheme vs. Public Provident Fund

Parameters NPS 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 Dual Tax Benefit over and above the Rs. 1, 50,000 limit u/s 80C.
Salaried Individual: Investment up to 10% of Basic + DA is eligible for deduction u/s 80CCD(2). Additionally, contributions up to Rs.50,000 are exempted u/s 80CCD(1B).
Self Employed Professional: Investment up to 20% of Gross Annual Income is eligible for tax deduction u/s 80 CCD(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

National Pension Scheme vs. Equity Linked Savings Scheme

Parameters NPS ELSS Mutual Funds
Eligibility Age Between 18 - 65 No min. or max. limit. Minor accounts can be opened.
Minimum Amt. to Invest p.a. Minimum investment per year is Rs.1000. Minimum investment to start is Rs.500.
Tax Benefit Dual Tax Benefit over and above the Rs. 1, 50,000 limit u/s 80C.
Salaried Individual: Investment up to 10% of Basic + DA is eligible for deduction u/s 80CCD(2).
Additionally, contributions up to Rs.50,000 are exempted u/s 80CCD(1B).
Self Employed Professional: Investment up to 20% of Gross Annual Income is eligible for tax deduction u/s 80 CCD(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)

In case of queries in relation to National Pension Scheme,

write us at: nps@acm.co.in

Contact: 022-2858 3355

Disclaimer : All figures and data given above are dated unless stated otherwise. In the preparation of the material contained in webpage, the ACMIIL has used information that is publicly available and including information developed in-house. Information gathered and material used in this webpage is believed to be from reliable sources. The ACMIIL however does not warrant the accuracy, reasonableness and / or completeness of any information. Actual results may differ materially from those suggested by the forward looking statements due to risk or uncertainties associated with our expectations with respect to, but not limited to, exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on NPS investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates/tax rates, equity prices or other rates or prices etc. For more details, visit: http://www.investmentz.com/disclaimer.aspx