Read about the National Pension System (NPS) Feature And Interest Rate

The National Pension System (NPS) is a voluntary, defined contribution retirement savings plan so that clients can be able to make good decisions about the future through savings during their working life. The purpose of NPS is to encourage the habit of saving for retirement among the citizens. This is run by the Pension Fund Regulatory and Development Authority (PFRDA). PFRDA says that it is an effort towards finding a permanent solution to the problem of providing adequate retirement income to every citizen of India.

Where does the NPS make your money?

Under NPS, personal savings are deposited in a pension fund, which is invested by PFRDA-regulated commercial fund managers, including government bonds, bills, corporate debentures and shares, PFRDA has pfrda.org.in on its website.

Benefits of National Pension System

PFRDA has said that NPS provides a series of investment options for pension fund manager (PFM) to plan for an increase in your investment and to increase your money in a proper investment. Individuals can switch from one investment option to another or from one fund manager to another for some regulatory restrictions. NPS Interest rates are completely related to the market.

How NPS Works

On opening the account with NPS, you provide a Permanent Retirement Account Number (PRAN), which is a unique number and lives with the customer throughout the lifetime. This process is structured in two levels-

Tier I

is a non-withdrawal permanent retirement account in which the customer deposits and invests on the basis of the option.

Tier II

is a voluntary withdrawal account which can only be received by the customer who is already active in Tier I account. Let us tell you that the withdrawal of this account is as per the customer’s requirements.

Is National Pension System (NPS) the only pension scheme available in the country?

No, some mutual funds and insurance companies also offer pension or retirement plans, but they are not in the jurisdiction of PFRDA. The options for some other retirement plans are Employee Provident Fund, Gratuity etc., which are given by employers to their employees.

Pension Fund registered by Pension Fund Regulatory and Development Authority:

The pension fund for public sector (PF)

  1. LIC Pension Fund Limited
  2. SBI Pension Funds Pvt. Ltd.
  3. UTI Retirement Solutions Limited

The pension fund for the private sector (PF)

  1. HDFC NPS
  2. ICICI Prudential Pension Fund Management Company Limited
  3. Kotak Mahindra Pension Fund Limited
  4. LIC Pension Fund Limited
  5. Reliance Capital Pension Fund Limited
  6. SBI Pension Funds Pvt. Ltd.
  7. UTI Retirement Solutions Limited
  8. Birla Sunlife Pensions Management Limited (Business to start now

Schemes managed by the Pension Fund Manager under the National Pension System

  1. Schemes applicable to government employees
  2. Central government scheme
  3. State government scheme

Plans applicable to individuals and companies

  1. NPS Lite Scheme
  2. Corporate CG Plan
  3. Plan – E (Tier I and Tier II)
  4. Plan – C (Tier I and Tier II)
  5. Plan -G (Tier I and Tier II)
  6. Plan – A (Tier I)

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