Everything You Need to Know About NPS Tier-II

Regulated and administered by the Pension Fund Regulatory and Development Authority(PFRDA), National Pension Scheme is a reliable government-backed plan. Any individual aged between 18 years and 60 years can open the National Pension Scheme Account.
As National Pension Scheme allows individuals to make systematic investments, liquidity is never an issue. An eNPS account can also be opened if you have Pan Card or Aadhar Card.

Read more
  • Peaceful Post-Retirement Life

  • Tax Free Regular Income

  • Wealth Generation to beat Inflation

We are rated~
rating
6.7 Crore
Registered Consumers
51
Insurance Partners
3.4 Crore
Policies Sold

Invest ₹6,000/month & Get Tax Free Monthly Pension of ₹60,000

Get the best returns & make the most of your Golden years

+91
Secure
We don’t spam
Please wait. We Are Processing..
Your personal information is secure with us
Plans available only for people of Indian origin By clicking on "View Plans" you agree to our Privacy Policy and Terms of use #For a 55 year on investment of 20Lacs #Discount offered by insurance company
Get Updates on WhatsApp
We are rated~
rating
6.7 Crore
Registered Consumers
51
Insurance Partners
3.4 Crore
Policies Sold
Pension Funds
Pension Funds Most Popular
Fund Name
AUM
Returns (in %)
3 Year
5 Year
10 Year
10,158 Cr
Returns
25.65%
Highest Return
Returns
20.95%
Returns
21.46%
Get Details
3,446 Cr
Returns
24.85%
Highest Return
Returns
17.1%
Returns
19.88%
Get Details
31,393 Cr
Returns
21.88%
Highest Return
Returns
16.37%
Returns
18.59%
Get Details
5,017 Cr
Returns
22.48%
Highest Return
Returns
14.53%
Returns
18.46%
Get Details
3,654 Cr
Returns
30.69%
Highest Return
Returns
23.19%
Returns
18.37%
Get Details
10,627 Cr
Returns
17.54%
Highest Return
Returns
14.85%
Returns
15.08%
Get Details
2,455 Cr
Returns
18.09%
Highest Return
Returns
14.25%
Returns
13.91%
Get Details
Why we need your mobile number?
We need it to confirm more details about you and advise accordingly. Our licensed experts work for you, not the insurance companies, so their advice is entirely unbiased
— No sales pitches here

In this article, you will understand more about NPS Tier-II, its features, benefits, and more.

Who Should Invest In NPS?

National Pension Scheme is best suited for individuals who are unable to decide their asset allocations or do not have time to manage their investment.

An NPS is a completely government-backed scheme and any person who wants to plan their early retirement and does not wish to take high risks should undoubtedly go for it.

A salaried person who wants to take the best advantage of 80C deductions should consider National Pension Scheme.

Types Of Accounts Under NPS

  1. Tier-I Account

    • Functions as a pension account
    • Withdrawn are subject to specific restrictions
    • The account can be opened with a minimum deposit of 500 rupees
  2. Tier-II Account

    • Functions as voluntary account
    • Offers liquidity of funds through investments and withdrawals
    • Account can be opened with a minimum deposit of 250 rupees
    • Tier-I account needs to be active to open a Tier-II account

People also read: best pension plan in india

About Tier-II Account

Any Indian citizen who wishes to can opt for a National Pension Scheme account. once opted, the holder will have a Tier-I account by default.

The NPS holder can voluntarily opt for a Tier-II account. Once you get a Tier-II account, you can

  • Invest in different funds
  • Can withdraw money any time as there is no lock-in period
  • Build a huge corpus towards retirement
  • Invest 50% amount in equity funds
  • Opt for auto-choice in which funds will be allotted based on your
  • Income
  • Age
  • Risk profile

How To Open NPS Tier-II Account

You can either go for an offline or online method to open a National Pension Scheme Account

  1. Offline:

    • The account can be opened through “Subscriber’s POP-SP”
    • Download Annexure-I Tier-II detail form
    • Fill it correctly and send it to POP-SP
    • Provide bank account details
    • Withdrawals will be directly transferred to the bank account provided
  2. Online:

    • Open electronic National Pension System (eNPS)
    • Click the Tier-II activation tab
    • Fill in required details like,
      • Permanent Retirement Account Number (PRAN)
      • Date of Birth
      • PAN card
    • OTP will be generated on your registered mobile number
    • Next, fill in your bank account details
    • Validate your Aadhar card
    • Next, select your Pension Fund Manager
    • Click on the suitable investment option, that is,
      • Auto choice
      • Active choice
    • Upload all the necessary documents
    • Make a minimum payment of 1,000 rupees in the account
    • e-Sign the application
    • Your Tier-II account is successfully activated

Benefits Of Tier-II Account

Tier-II account under National Pension Scheme comes with the following benefits

  • Flexible withdrawals
  • No lock-in period
  • No exit load application
  • No annual maintenance charges
  • Easy transfer of funds from Tier-I to Tier-II as and when required
  • Nominee can be assigned

Eligibility Under Tier-II Account

  • All Indian citizens whether residing in India or not can open an NPS account
  • Age limit: 18 to 65 years
  • Separate rules for people applying between 60-65 years of age

How To Exit NPS Tier-II Account

As per PFRDA Regulations of 2015, the reason for exit from Tier-II account must be one of the following:

  1. Normal Superannuation

    • 40% of the account balance must be used to purchase an annuity
    • The annuity provides a monthly pension to the subscriber
    • Balance is returned in lump-sum
    • If the total corpus is less than equal to 2,00,000 rupees, complete withdrawal can be made
  2. Death

    • 80% of the account balance must be used to purchase the annuity
    • The annuity provides a monthly pension to the spouse
    • Balance is returned in lump-sum to the nominee
    • If the total corpus is less than equal to 2,00,000 rupees, complete withdrawal can be made by the nominee
  3. Premature Exit

    • 80% of the account balance must be used to purchase the annuity
    • The annuity provides a monthly pension to the subscriber
    • Balance is returned in lump-sum
    • If the total corpus is less than equal to 1,00,000 rupees, complete withdrawal can be made

Difference Between Tier-I And Tier-II Account Explained

National Pension Scheme

Tier I

Tier II

Eligibility

Any Indian citizen between 18 & 65 years of age

Members of Tier-I only

Lock-in Period

Till the age of 60 years

NIL

Minimum number of contributions per annum

1

Nil, not important to contribute every year

Minimum amount for account opening

Rs 500

Rs 1,000

Minimum subsequent contribution

Rs 500

Rs 250

Minimum amount contribution per annum

Rs. 6000

NIL

Fund management charge

Same as Tier-II

Same as Tier-I

Available asset classes

Same for both

Equity (E): Predominant investment in Equity market instruments. Maximum 75%

Corporate Debt (C): Scheme invests in Bonds issued by Public Sector Undertakings (PSUs), Public Financial Institutions (PFIs), Infrastructure Companies and Money Market Instruments

Government Securities (G): Scheme invests in Securities issued by Central Government, State Governments and Money Market Instruments

Alternative Investment Funds (A): In this asset class, investments are being made in instruments like CMBS, REITS, AIFs, etc.

Tax benefits

For Tier-I investments, tax is deductible within the total ceiling of 1.5 lakh under Section 80CCD (1)

No tax benefit

Allowed up to Rs.50,000 as deductions towards Tier-I contributions under 80CCD 1(B)

Conclusion

National Pension Scheme is a reliable government-backed plan which creates a financial corpus for an individual even after retirement. With more amendments and improvisations being made by the government, this scheme is considered simple and easy than other pension schemes in the market.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

Secure Your Retirement Today
Start Investing ₹6,000/month
Get Pension ₹60,000/month+
Including Life Cover
View Plan
Pension Plans
+Standard T&A Applied
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
Secure your Retirement today!
START INVESTING
₹6,000/month
GET PENSION
₹60,000/month+
Heart
INCLUDING LIFE COVER
+ Standard T & C Apply*
Pension Calculator
Pension Calculator
How much do you need to save for retirement?
₹ 20,000
₹ 25,000
₹ 30,000
Monthly Expenses in 2023
Edit Done
Your expense go up every year by
Today 2023 Your expenses today in 2023, at the age of 34 Yrs
Your expenses in 2043, at the age of 55 Yrs
For a monthly pension of ₹77,300
you need to invest
₹14,300/month
Calculated as per past performance of 15%
View Plan Recalculate?

Pension plans articles

Recent Articles
Popular Articles
NPS vs ULIP - Which One Is Better?

10 Oct 2023

NPS (National Pension System) and ULIP (Unit Linked Insurance
Read more
Best Mutual Funds for Retirement

21 Sep 2023

Planning for a secure and comfortable retirement is a financial
Read more
Mahila Samman Savings Certificate (MSSC)

04 Sep 2023

The Mahila Samman Savings Certificate (MSSC) or Mahila Samman
Read more
Single-Premium Pension Plan

28 Aug 2023

Single-Premium Pension Plan is a type of pension plan in which
Read more
Inflation Impact on Pension

12 Jul 2023

Inflation is an economic process that affects various aspects of
Read more
Sevarth Mahakosh
Sevarth Mahakosh Portal is a one-stop solution for all state government employees' financial transactions and
Read more
How to Unfreeze NPS Account?
Are you facing trouble accessing your NPS account and being unable to deposit your recurring subscription? Do not
Read more
NPS Calculator for Government Employees
National Pension Scheme or National Pension System (NPS) is launched by the Government of India for all its
Read more
NPS Calculator 2023
NPS Calculator is a financial tool that calculates potential returns on the National Pension Scheme, by inputting
Read more
Post Office NPS Calculator 2023
National Pension System is a scheme launched by the Government of India that offers stability to all Indian
Read more

top
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL