The Pension Fund Regulatory Development Authority (PFRDA) has recently announced that subscribers of the National Pension System (NPS) can now buy several annuity schemes from the same provider if they allocate over Rs 10 lakh towards annuity corpus. This means that they can invest Rs 5 lakh in each annuity scheme, offering them a wider range of choices.
About National Pension System (NPS)
- The National Pension System (NPS) is a pension cum investment scheme introduced by the Government of India.
- It aims to provide old age security to Indian citizens by offering a safe and regulated market-based return for long-term savings.
- The National Pension System was first introduced for government employees joining service on or after January 1, 2004. It was later extended to all citizens in 2009 as a voluntary retirement savings scheme.
- The scheme is regulated by the Pension Fund Regulatory and Development Authority (PFRDA).
- The National Pension System Trust (NPST) is responsible for managing all assets under NPS.
Advantages of the National Pension System
- Flexible: NPS allows subscribers to choose the amount of contribution and frequency of investment as per their financial goals.
- Tax Benefits: Contributions made towards NPS are eligible for tax benefits under Section 80C and Section 80CCD(1B) of the Income Tax Act.
- Portable: The NPS account is portable across jobs and locations, providing flexibility to subscribers.
- Regulated: The scheme is regulated by the Pension Fund Regulatory and Development Authority (PFRDA), ensuring transparency and accountability.
- Market-linked returns: NPS investments are made in regulated market instruments such as equities, bonds, and government securities, providing the potential for higher returns compared to traditional investment options.
- Retirement Income: At maturity, subscribers can withdraw a part of the accumulated corpus as a lump sum, and use the remaining corpus to purchase an annuity, providing a regular source of income during retirement.
Models under the National Pension System
There are different models of NPS to cater to various categories of people, which include:
- All Citizen Model
- Government Sector Model
- Corporate Model
- Atal Pension Yojana
- NRI Model
Mobile App of National Pension System
The NPS mobile app allows subscribers to view their account details online. By logging in with their user ID (PRAN) and password, subscribers can access their latest account information as available on the CRA website. The app also allows subscribers to update their contact details and password easily.
The app offers the following features:
- View current holdings in the account
- Request for transaction statement for the year to be sent to their email ID
- Update contact details such as telephone number, mobile number, and email ID
- Change password or secret question
- View account details
- Regenerate password using a secret question
- View the last 5 contribution transactions carried out
- Receive notifications related to NPS
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What is the national pension system?
National Pension System (NPS) is a retirement savings scheme introduced by the Government of India. It is a defined contribution pension system where the retirement benefits depend on the amount of contributions made by the subscriber and the investment returns generated from it. The scheme is regulated by the Pension Fund Regulatory and Development Authority (PFRDA) and provides pension options to subscribers from various sectors such as government, private, and unorganized. The System aims to provide a sustainable and long-term retirement savings platform to individuals.
Is NPS monthly or yearly?
The National Pension System is a retirement-oriented investment scheme in India where contributions are made regularly by the subscriber during their working life and the accumulated savings are utilized for their retirement income. The frequency of contributions can be either monthly, quarterly, or half-yearly, as chosen by the subscriber. However, the income from the NPS account is generally received monthly after the age of retirement.