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NPS or National Pension Scheme: All details on this retirement planning scheme

The National Pension Scheme or NPS is a relatively recent retirement-saving scheme introduced by the Govt of India and regulated by the PFRDA.  It is open for all citizens of India in the working age. The objective of this scheme is to provide pension income through market-based returns. The Government offers some significant and exclusive tax benefits on the NPS scheme to encourage citizens to save for retirement. After Budget 2019, NPS tax status is now EEE. NPS Scheme details in one infographic The infographic below presents all NPS pension scheme details in a concise and easy-to-read way. It answers questions such as what is the NPS scheme, how NPS works, what are NPS tier 1 and tier 2 accounts, NPS tax benefits and the various contribution, investment and withdrawal rules. In the rest of this blog, we explain these points in greater detail. We strongly suggest that you also have a look at our free, downloadable NPS excel calculator , to see how the different NPS rule
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Can NRIs invest in NPS?

NRIs can invest in the NPS Tier 1 account which is the retirement account and enjoys tax benefits. They are however not allowed to invest in the Tier 2 account which is the more flexible, wealth building account. In this blog post, we look at the different aspects of NRI investment in NPS. We also look at the question of how NRIs can open an NPS account and what to do if citizenship status changes. Before you read this post, we strongly suggest that you through our NPS overview post: NPS details: All you want to know about this retirement planning scheme . In the current post, we will be building upon the information already provided in that article to highlight the NRI specific aspects of NPS. A brief overview of the NPS scheme, Tier 1 and Tier 2 accounts The National Pension Scheme or NPS is a retirement-saving scheme run by the Government of India and regulated by the PFRDA. In NPS, all subscribers have a PRAN or a Permanent Retirement Account Number. Under a PRAN, a subscribe

How to open NPS Tier 2 account

In this blog post, we explain the procedure for opening the NPS Tier 2 account for existing NPS subscribers i.e. those who already have a Tier 1 account. We discuss both the online and offline methods for doing this. Unless otherwise stated, the contents of this post are relevant to the All Citizens Model. In case you are not an existing subscriber, then you cannot open a Tier 2 account stand-alone. Only Tier 1 account holders can open a Tier 2 account.  For new joiners, we have explained the procedure for applying for Tier 1 and Tier 2 accounts together, in great detail in the following blog posts: How to open your NPS account: A broad overview ,  How to open NPS account online and How to fill the NPS account opening form (for physical application). NPS Tier 2 account The NPS Tier 2 account is not a retirement product. It is a wealth-building product just like mutual funds. Opening an NPS Tier 2 account is optional. It is possible to be in the NPS system and have only a Ti

How to fill NPS account opening form: Get your offline application ready with supporting documents

In the blog post, we look at the  procedure for investing in NPS account offline by submitting filled NPS form and supporting documents at a POP branch .  This is applicable for new joiners looking to invest in NPS Tier1 or a Tier 1 plus Tier 2 account.  Please note that unless otherwise stated, the contents of this post are relevant to the All Citizens Model. We have done a series of posts on applying for NPS accounts, which you may find useful How to open your NPS account: A broad overview  of everything related to the NPS account opening process. This is a must-read if you are looking to open an NPS account. How to open NPS account online : A step-by-step guide to using the eNPS portal for investing in NPS account online How to fill the NPS registration form : The current post. A detailed guide to getting your offline application ready How can NRIs open NPS account : We discuss both the online and offline methods of NPS account opening for NRIs How to open NPS Tier 2 accoun

How to open NPS account - An overview

NPS account opening can be done through both online and offline methods. Individuals can apply for an NPS account offline by submitting their application at a Point-of-presence (POP) branch. Around 85 major banks and financial institutions have been registered as POPs with PFRDA. Online NPS registration can be done through the eNPS portal. Even in eNPS, the applicant needs to select a POP with whom they have a bank, demat, mutual fund, or insurance account. Of the 85 POPs, 55 are available on the eNPS platform. In both cases, the selected POP is responsible for verifying the application details and then forwarding it to the Central Recordkeeping Agency (CRA). There are two CRAs in NPS – NSDL and Karvy. The CRA receiving the application will open an NPS account for the applicant. First-time NPS investors can apply for only the Tier 1 account or Tier 1 + Tier 2 account both. In this case, a new PRAN will be generated. Existing NPS subscribers who only have a Tier 1 account can apply f