Investment Products
A government-backed retirement savings scheme designed to help you build a secure financial future with tax-efficient, flexible, and portable retirement planning solutions.
The National Pension System (NPS) is a voluntary, defined contribution pension scheme launched by the Government of India and regulated by the Pension Fund Regulatory & Development Authority (PFRDA). This comprehensive retirement planning solution is designed to provide financial security during your post-retirement years.
NPS is accessible to all Indian citizens between the age group of 18 to 70 years, making it an inclusive retirement savings platform. The scheme operates on a defined contribution basis, where subscribers make regular contributions to build their retirement corpus over their working years.
NPS stands out as an easily accessible, low-cost, tax-efficient, flexible, and portable retirement savings account. It offers subscribers the freedom to choose their investment options, pension fund managers, and contribution amounts, providing complete control over their retirement planning journey.
Suitability
NPS is one piece of a retirement plan. We usually pair it with mutual fund SIPs, EPF, PPF and other assets rather than relying on NPS alone.
Understanding the NPS mechanism is crucial for making informed retirement planning decisions. Here's how the system operates:
Upon opening an NPS account, a unique and portable Permanent Retirement Account Number (PRAN) is created for the subscriber. This PRAN remains with you throughout your lifetime, regardless of job changes or location shifts.
Subscribers make regular contributions to their NPS account throughout their working years. These contributions are invested in various asset classes based on the subscriber's choice, helping build a substantial retirement corpus over time.
Upon reaching retirement age (60 years), subscribers can withdraw a portion of the accumulated corpus as a lump sum. The remaining corpus must be invested in an annuity scheme to provide a regular monthly pension for the rest of their life.
The National Pension System is designed to be inclusive and accessible to a wide range of individuals:
Any Indian citizen between the age of 18 years and 70 years can join the National Pension System. There is no upper age limit for making contributions, allowing individuals to start their retirement planning at any stage of their career.
NPS offers two types of accounts to cater to different retirement planning needs:
This is the primary retirement account with tax benefits. It has restrictions on withdrawals and is designed for long-term retirement savings. A minimum contribution of ₹500 per year is required to keep the account active. Withdrawals are allowed only under specific conditions like retirement, partial withdrawal after 3 years, or in case of critical illness.
This is a voluntary savings account with no tax benefits. It offers complete flexibility with no restrictions on withdrawals, making it suitable for short-term financial goals. You can open a Tier II account only if you have an active Tier I account. There is no minimum contribution requirement, and you can withdraw funds at any time.
NPS provides subscribers with flexibility in choosing their investment strategy:
Subscribers can actively choose their asset allocation across Equity (E), Corporate Bonds (C), Government Securities (G), and Alternative Investment Funds (A). You can allocate up to 75% in equity (up to 50% for government employees) and adjust your allocation based on your risk appetite and investment horizon.
For subscribers who prefer a hands-off approach, Auto Choice automatically adjusts the asset allocation based on your age. The allocation becomes more conservative as you approach retirement, reducing equity exposure and increasing debt allocation. Three lifecycle funds are available: Conservative, Moderate, and Aggressive.
NPS offers comprehensive tax benefits under the Income Tax Act, making it one of the most tax-efficient retirement savings instruments:
Contributions up to ₹1.5 lakh per financial year are eligible for tax deduction under Section 80C of the Income Tax Act, 1961. This is part of the overall ₹1.5 lakh limit under Section 80C.
An additional deduction of up to ₹50,000 is available under Section 80CCD(1B) for NPS contributions. This is over and above the ₹1.5 lakh limit under Section 80C, providing a total tax benefit of up to ₹2 lakh per year.
Up to 60% of the accumulated corpus can be withdrawn tax-free at retirement. The remaining 40% must be used to purchase an annuity, which provides regular pension income. The annuity income is taxable as per your income tax slab.
NPS provides flexible withdrawal options to meet various financial needs:
Subscribers can make partial withdrawals from their Tier I account after completing 3 years. You can withdraw up to 25% of your contributions (not the total corpus) for specific purposes such as children's higher education, marriage, purchase or construction of a house, or treatment of critical illnesses. This facility can be availed up to 3 times during the entire tenure of the account.
If you exit NPS before reaching 60 years of age, you can withdraw only 20% of the accumulated corpus as a lump sum, and the remaining 80% must be used to purchase an annuity. However, if the corpus is less than ₹2.5 lakh, you can withdraw the entire amount without purchasing an annuity.
At the age of 60, you can withdraw up to 60% of the accumulated corpus as a lump sum (tax-free), and the remaining 40% must be used to purchase an annuity to receive a regular pension. If the corpus is less than ₹5 lakh, you can withdraw the entire amount without purchasing an annuity.
You can choose to defer your withdrawal beyond 60 years and continue contributing to your NPS account until the age of 70. This allows your corpus to grow further and potentially provide a higher pension amount when you finally exit.
NPS offers numerous advantages that make it an attractive retirement planning option:
Your PRAN is portable across jobs and locations, ensuring continuity in your retirement savings regardless of career changes.
NPS has one of the lowest fund management charges in the industry, ensuring that more of your money works for you.
Regulated by PFRDA, ensuring transparency, security, and investor protection in all operations.
Choose your contribution amount, investment options, and pension fund managers based on your preferences and risk appetite.
Your funds are managed by professional Pension Fund Managers (PFMs) with expertise in various asset classes.
Manage your NPS account online, track your investments, and make contributions conveniently through digital platforms.
Opening an NPS account is a straightforward process. You can open an account through various Points of Presence (POPs) including banks, financial institutions, or online platforms.
We are pleased to inform you that NJ India Invest Pvt. Ltd. has registered as a Point of Presence (POP) for providing National Pension System (NPS) services. This enables our E-Wealth clients to seamlessly open and manage their NPS accounts through our platform.
Eligibility: Only Resident individuals, aged between 18 to 70 years, can open an NPS account through NJ. Clients can also invest in NPS through their NJ E-Wealth or E-Wealth MF account.
Follow these step-by-step instructions to register for NPS through the NJ E-Wealth platform:
Visit https://ewa.njindiaonline.com/ewa/ and log in with your E-Wealth or E-Wealth MF account credentials. Navigate to Transact > National Pension Scheme (NPS).
The system will display pre-populated information including your name as per EWA, Date of Birth, Permanent Address, Corresponding Address, and Gender. If your EWA account was opened through Aadhaar, the Applicant Name as per Aadhaar will be displayed automatically. Otherwise, you will need to enter the name as per Aadhaar, as this will be printed on the NPS Registration Form. Review all details and click on Continue.
Upload a passport-size photograph and crop it as required. (Note: If available, the photo will be automatically fetched from your KYC records.) Fill in other basic details including the name to be printed on your PRAN Card and mobile number. Select your Account Type: Either Tier I or Tier I & II. Click on Next.
Fill in the required details for your selected NPS Account type (Tier I or Tier I & II):
Note: Upload Bank Proof and PAN Card copy. Click on Next.
Review and accept the FATCA (Foreign Account Tax Compliance Act) and CRS (Common Reporting Standard) Terms & Conditions. Click on "Submit & Proceed to Esign".
Click on the link to View NPS Form to enable the E-Sign link. Click on "Proceed to Esign". Complete the E-Sign process using either OTP or Biometric authentication. The OTP will be sent to your mobile number registered with UIDAI (Aadhaar).
Upon successful completion of the E-sign process, your Permanent Retirement Account Number (PRAN) will be allocated to you. You will receive confirmation of your PRAN allocation.
If E-SIGN is successful, you will be redirected to the Payment Module. Select your preferred payment mode: Netbanking or UPI. Enter the Contribution Amount for your selected NPS Account Type and proceed to make the payment.
Upon successful payment, you will have the option to print or email the Acknowledgment for your records. Save this acknowledgment for future reference.
Once the payment confirmation is received by the bank, your PRAN will be activated on T+1 working day, where T Day = date of receipt of payment confirmation.
On successful activation of your PRAN, your investment will be executed on T+2 working days, where T Day = date of receipt of payment confirmation. You will receive confirmation of your investment allocation.
The National Pension System (NPS) is a voluntary, defined contribution pension scheme launched by the Government of India and regulated by the Pension Fund Regulatory & Development Authority (PFRDA). It is designed to provide retirement income security to all Indian citizens between the age of 18 and 70 years.
Any Indian citizen between the age of 18 years and 70 years can open an NPS account. There are no restrictions based on employment status, income level, or location. Both salaried and self-employed individuals can join the scheme.
PRAN stands for Permanent Retirement Account Number. It is a unique 12-digit number allocated to each NPS subscriber upon account opening. This number remains with you throughout your lifetime and is portable across jobs and locations.
Tier I is the primary retirement account with tax benefits but restrictions on withdrawals. It requires a minimum contribution of ₹500 per year. Tier II is a voluntary savings account with no tax benefits but complete flexibility in withdrawals. You can open a Tier II account only if you have an active Tier I account.
NPS offers triple tax benefits: (1) Contributions up to ₹1.5 lakh are eligible for deduction under Section 80C, (2) Additional deduction up to ₹50,000 under Section 80CCD(1B), and (3) Up to 60% of the corpus can be withdrawn tax-free at retirement. The remaining 40% used for annuity purchase is also tax-free.
Yes, partial withdrawals are allowed from Tier I account after 3 years for specific purposes like children's education, marriage, house purchase/construction, or treatment of critical illnesses. You can withdraw up to 25% of your contributions (not the total corpus) and this facility can be used up to 3 times during the account tenure.
At 60 years, you can withdraw up to 60% of the accumulated corpus as a lump sum (tax-free), and the remaining 40% must be used to purchase an annuity to receive a regular monthly pension. However, if the corpus is less than ₹5 lakh, you can withdraw the entire amount without purchasing an annuity.
Yes, you can defer your withdrawal and continue contributing to your NPS account until the age of 70. This allows your corpus to grow further and potentially provide a higher pension amount when you finally exit.
NPS offers two investment approaches: (1) Active Choice - where you can choose your asset allocation across Equity (E), Corporate Bonds (C), Government Securities (G), and Alternative Investment Funds (A), and (2) Auto Choice - where the asset allocation is automatically adjusted based on your age through lifecycle funds (Conservative, Moderate, or Aggressive).
For Tier I account, the minimum contribution is ₹500 per year to keep the account active. There is no maximum limit on contributions. For Tier II account, there is no minimum contribution requirement.
You can track your NPS investments online through the NPS portal (www.npscra.nsdl.co.in) using your PRAN and password. You can also access your account through the NPS mobile app or through your Point of Presence (POP) like NJ India Invest.
Yes, you can change your Pension Fund Manager and investment option once per financial year. This can be done online through the NPS portal or by submitting a request to your Point of Presence.
Your PRAN is portable, so your NPS account remains with you regardless of job changes. You can continue making contributions from your new employer or as an individual subscriber. The account is not tied to any specific employer.
Yes, NPS is regulated by the Pension Fund Regulatory & Development Authority (PFRDA), which ensures transparency, security, and investor protection. The funds are managed by professional Pension Fund Managers who are regulated entities. However, like all market-linked investments, NPS is subject to market risks.
NPS has one of the lowest fund management charges in the industry (typically 0.01% of assets under management). Other charges include account opening charges (if applicable), transaction charges, and annual maintenance charges. The overall expense ratio is significantly lower compared to other retirement savings products.
