What is NPS?

A retirement product envisaged by Govt. of India and regulated by PFRDA.

NPS is a defined contribution product which means that the amount that you contribute on a periodic basis can be fixed. At the same time, you can also invest surplus money every now and then in your NPS account.

The greater the value of the contributions made, the longer the term over which the fund accumulates and the lower the charges deducted, the larger would be the eventual benefit of the accumulated pension wealth.

For example, you can start by investing only Rs. 1,000/- every month (defined contribution) in your NPS account, increasing this amount every year as your salary increases. This systematic accumulation would be invested in a customized combination of three asset classes as per your choice: Equity, Corporate Debt and Government Securities. The final corpus available and hence the value of the pension at retirement would depend on how the markets (equity and debt) have performed over the years.

Who is It for?

For Salaried individual:

NPS, if opted for by indicating to your employer to make contributions on your behalf, is known as the ‘Corporate Model’. You can benefit from additional tax deductions of up to 10% of your basic salary over and above the usual deduction under section 80C of Indian Income tax act 1961.

For Self Employed or Others:

If you don’t work with an organization that offers NPS, or are self employed, or are not earning regular income, you can still opt for NPS under the ‘All Citizens Model’. You will get all benefits of NPS, except additional tax deduction.

Benefits of NPS

with the opportunity to gain from market movements over the long term, while spreading risk between multiple asset classes

which is regulated by the Pension Fund Regulatory & Development Authority (PFRDA) and introduced by the Government of India.

over and above the usual deduction u/s 80 C for investments of Rs. 100,000 (Up to 10% of basic salary without any cap)

with management fees ceiling of 0.0102% for government employees and 0.25% for the private sector.

Invest the way you want- equity, corporate bonds and government securities (maximum 50% in Equity)

Choose your own Pension Fund Manager

Invest small amounts regularly, with the added benefit of the power of compounding

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