If Retirement Planning is on top of your mind, National Pension Scheme (NPS) is one of the best investments you can do. Even with small but regular saving through National Pension Scheme (NPS), you can build a good retirement fund for you.On top of that the money that you invest in NPS, brings your tax saving benefits too.
So now combine the power of Savings, Tax Benefits, Compounding, Retirement Fund, Pension and a lot more with a single investment in NPS.
|FEATURES||NPS||EPF||PENSION ULIPs||MUTUAL FUNDS|
|Lock-in||Till 60 years||Not applicable||Till 60 years||Not applicable|
|Withdrawal||Not allowed||Allowed for Specific purposes||Not allowed||No restriction on withdrawal|
|Equity exposure||Only up to 50%||No equity exposure||No cap on exposure||No cap on exposure|
|Annuity||40% of maturity proceeds||Not applicable||One-third of the maturity proceeds||Not applicable|
|Tax Benefit||Under Section 80C of I-T Act||Under Section 80C and 10(10D)||Under Section 80C and 10(10D)||LTCG on equity funds Tax-Free|
|Minimum Guarantee||Proposed||Not applicable||Minimum return on premium paid||Not applicable|
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National Pension Scheme (NPS) earlier known as New Pension System is a pension system that was launched by the government on April 1, 2004 with the objective of brining social security. It is a kind of investment product where the main objective is retirement planning & financial compensation upon retirement. Under NPS you invest a pre-defined sum every month in a fund chosen by you and at the time of retirement you would get a onetime lump sum amount depending on the performance of that fund. The funds under NPS work more like mutual funds or unit liked insurance plans where you invest certain amount and the entire management is done by professional agencies.
Although, initially it was started as a pension scheme only for the government employees, but now NPS has been open to people from the private sector as well.
Once you retire from your job, your earning stops and hence after retirement either you need a monthly income or at the time of retirement you should have a substantial amount with you which can take care of expense to a larger extent. NPS or National Pension Scheme is basically for people who do not have the benefit of pension after retirement from service. Now even the government sector employees are being kept away from fixed pension plans. NPS acts as an opportunity to the subscriber to build up his retirement corpus or pension fund over a long period so that after retirement he can draw pension for his expenses & livelihood. If you look at NPS as an investment product, it is the cheapest market based investment product available in India today, meaning the cost of investment in NPS is lowest which makes it more appealing as an investment option. To know more about advantages of NPS, call us now.
Primarily there are two categories of National pension Schemes (NPS). They are known as Tier I NPS account & Tier II NPS account respectively.
Tier I NPS Account-:
Tier I NPS account is mandatory for all central government employees. Because the government has stopped giving pensions on its own, now it is mandatory for government employees to contribute 10% of their basic salary + DA every month towards this account, and the same amount is invested on behalf of the employee by the government directly. In Tier I account, withdrawal of funds is largely restricted before the retirement age of 60 years. If you withdraw the amount, you have to necessarily invest 80% of your money in an annuity with Insurance Regulatory Development Authority (IRDA), whereas you can keep the remaining 20% with you. When you withdraw after the age of 60, you have to invest at least 40% in an annuity with IRDA; the remaining can be withdrawn by you as per your requirement. Tie I NPS is open to all whether you are a government employee or private sector employee or business person. There is a minimum amount that you have to commit to investing in NPS, and for the Tier 1 account that minimum is Rs. 6,000 per year.
Tier II NPS Account-:
The Tier II NPS account is like Tier I account only, but if you are not a government employee, you have the choice to invest the minimum of Rs. 6,000 in Tier 1 and then invest the rest of your money in the Tier II account, where withdrawal restrictions are simpler & easier for you. Tier II account acts as a supplement to Tier I account but you can't open standalone Tier II account. Minimum amount for opening Tier II account is Rs.
Any Indian citizen, including NRIs, between the age of 18 and 60 years, whether working or not working, whether into government service or private job or business, all can invest in NPS. National Pension Scheme is open to all as the core objective of the scheme is social security. You should possess a valid ID, Address & Age Proof and you are on. Raghunandan Money is there to take care of all your queries on NPS. Register now and let us tell you how NPS can be a good investment option for you.
Investing in NPS is as easy as opening your bank account but there are certain things which you need to analyze and decide. You have the choice of fund managers and hence you should have a comparative look before you decide your fund manager. Similarly there are different types of funds which you can opt for. To facilitate all this and making things easier for you is the specialty of Raghunandan Money. Our advisors bring minutest of information with facts and figures and help you in making the right decision. After all the NPS return on investment is market driven, so our financial markets expertise comes in place here. Raghunandan Money is an authorized POP (Point of Presence) to offer you NPS services.
The onetime fee for opening an NPS account is Rs 50/. Whereas the onetime registration charges are Rs 100/. In addition to this there is an annual maintenance charge of Rs 190/- payable by the client. The funds being deposited in NPS account is subject to Annual Funds Management Charges by the fund managers. The fund management charges varies from company to company but the government has put the maximum cap at 0.25% of the fund amount to be taken as the fund management fees from the client. The charges are as per the schedule prescribed by the authorities and are subject to change. At Raghunandan Money, we customize our services to bring you value for money so whatever little charges you pay for NPS, our advisory & personalized services go beyond that pricing. Always keep in mind that looking at the comparatively lower fees & charges involved NPS is the cheapest market-linked financial product in the country.