National Pension Scheme ie NPS is a retirement scheme. This scheme is run by the government organization Pension Fund Regulatory and Development Authority (PFRDA). Anyone from 18 years to 70 years can contribute to this scheme. In this, an annual contribution of at least Rs 6000 has to be made.
Whenever it comes to a safe investment for retirement, NPS i.e. National Pension Scheme comes out as a major option. By investing in NPS, you can create a huge corpus for your retirement. It is a government fund, which is managed by the Pension Fund Regulatory and Development Authority (PFRDA), a government body.
In this report, we will know what is NPS and how can we deposit huge funds through this fund?
What is NPS? (What is NPS?)
NPS is run by PFRDA, an organization controlled by the Central Government. You can accumulate a huge corpus by making regular contributions to this fund. If you are a regular contributor to NPS, then after the age of 60 years, you can withdraw up to 60 percent of the amount in lump sum and the rest of the money is used to give you pension. NPS gives an average return of 10% and with this the benefit of tax exemption is available on NPS.
Who can open NPS account?
NPS account can be opened by anyone above the age of 18 years and you can contribute till the age of 70 years.
How much can be invested in NPS?
An investor contributing to NPS has to invest at least Rs 6000 in a year. This investment has to be continued till retirement.
There are two types of accounts in NPS . The first is Tier 1 and the second is Tier 2. In Tier 1 account of NPS, you cannot withdraw money from the age of 60, while in Tier 2 account there is no limit for withdrawal and deposit and you can deposit and withdraw money as per your wish.
What are the benefits of NPS?
The biggest advantage of NPS is that in this you can save tax along with retirement fund. If you invest in NPS, you can get an additional deduction of Rs 1.50 lakh under Section 80C of the Income Tax Act 1961 and Rs 50,000 under 80CCE.
Is NPS the best option for retirement?
NPS and PPF are generally considered a good option for retirement. At present, PPF earns an interest of 7.1 per cent, while NPS usually fetches 10 per cent return.
