National Pension Scheme: The National Pension Scheme is a long term investment plan. After retirement, the government has introduced it to secure your life financially. Investment in NPS is done through financial security markets.

Retirement plan with NPS

Retirement is the most precious part of your life. At that time you get relief from your family and professional responsibilities. If there is financial stability at this time, then you get help in spending your life in a happy way. The National Pension Scheme is one of the most popular and most suggested products for retirement needs. Apart from regular income for retirement life, it also gives you tax benefit.

What is the National Pension Scheme

The National Pension Scheme is a long term investment plan. After retirement, the government has introduced it to secure your life financially. Investment in NPS is done through financial security markets. Under this, you have to invest a certain amount regularly in the NPS account. When you are 60 years old. In case of maturity, you can withdraw money according to your need.

There are 2 type accounts

There are 2 accounts under NPS. These include Tier 1 and Tier 2. You get the money deposited in Tier 1 account only after retirement. You can withdraw the money deposited in Tier 2 in case of emergency.

How much does it have to invest?

In this account, one has to invest minimum Rs 1000 every year. The maximum limit is not fixed. You can choose one of the active choice and auto choice mode for investment. In active choice mode, you can decide about the investment type and ratio between Government Securities, Equity, Altaranet Assets. Fund allocation is already determined depending on the ability to raise risk in auto choice mode.

When can you withdraw money?

On investing in NPS account, you can do 3 Parselly withdrawals, which should be maximum 25% of your total contribution. You can also choose the option to exit before time after 3 years of investment. In this situation you can remove 20% of your investment. You can use the remaining amount to buy annuity plan.

How much can you get returns?

NPS gets a return of 9 to 12%. A part of the investment in NPS goes into equity. It does not get guaranteed returns, but it gives more returns than other traditional tax saving investment like PPF.