NPS Withdrawal Rules and How to Choose Pension Fund Manager

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What is National Pension Scheme (NPS)

National Pension Scheme or NPS is a pension scheme. This scheme is sponsored by the Indian government. It was launched in January 2004. Any citizen from India can get his or her National Pension Scheme account opened. The minimum entry age to join the National Pension Scheme is 18 years. The maximum entry age to join the National Pension Scheme is 60 years. In order to the join National Pension Scheme, it is important that the person complies with the norms of know your customer or KYC. An NRI can also join the National Pension Scheme. The account can get closed due to any change in the NRI citizenship status. If you want to get your NPS account opened then you should visit a Point of Presence or POP. Many financial institutions and most of the public sector banks, private sector banks are working as POPs. To find a POP nearby your location, you should check the official website of PFRDA or Pension Fund Regulatory and Development Authority. You will be asked to fill up a registration form. There are some documents that you will have to submit to the POP along with registration form. These documents include proof of your birth date, identity, and address.

After subscription, you will be issued a card having a 12-digit number which is unique. This number is known as PRAN or Permanent Retirement Account Number. NPS includes two types of accounts Tier I account and Tier II account. The differentiation between these two accounts is made on the basis of the invested money withdrawal. It is not allowed to withdraw the invested money before the retirement from the Tier I account. The money can be easily withdrawn from the Tier II account. A person cannot have more than one NPS account. A person can easily get an NPS account ported across locations and sector so there is no requirement to have another NPS account. In a financial year, a person has to make the minimum contribution of Rs. 6,000 annually in the Tier I account. The account freezes when the subscriber does not make the minimum contribution. There are pension fund managers registered with Pension Fund Regulatory and Development Authority who manage the money invested by various subscribers. Currently, there are eight fund managers including ICICI Prudential Pension Fund, Kotak Mahindra Pension Fund, LIC Pension Fund, Reliance Capital Pension Fund, UTI Retirement Solutions Pension Fund, SBI Pension Fund, DSP BlackRock Pension Fund, and HDFC Pension Management Company Managers.

What are the withdrawal rules of National Pension System? 

Check out latest withdrawal rules related to National Pension System:

  1. After the completion of the subscription of 3 years, account holders can make a withdrawal from National Pension System. It is not allowed to withdraw more than 25% of the contributions done only by the account holder.
  2. National Pension Scheme has two accounts including Tier I and Tier II. From the Tier 1 National Pension System or NPS account, it is not possible to withdraw the money till the account holder turns 60 years. The partial withdrawal is permitted in specified cases.
  3. The Tier II NPS account works similar to a saving account. Account holders are free to withdraw the money as and whenever required.
  4. For finding the withdrawal limit of 25%, the employer contribution is not considered.
  5. The Pension Fund Regulatory and Development Authority or PFRDA issued some guidelines on January 10, 2018. As per these guidelines, account holders are allowed to withdraw the partial amount for children’s higher education. Lawfully adopted children are also included in this.
  6. An account holder can withdraw the invested money for the marriage of the child. The lawfully adopted child is also included in this.
  7. NSP account holders can withdraw the invested amount for the construction or purchase of a flat or residential house in one’s own name or lawfully wedded partner’s name. Under these regulations, no withdrawal should be permitted if the NPS account holder has his or her own residential house or flat separately or in joint names except the property of ancestors.
  8. NPS account holders are allowed to make a withdrawal for the treatment of specified illness. The treatment should be for the account holder, children, lawfully adopted child, lawfully wedded partner, or dependent parents. The specified illness shall include hospitalization. The treatment shall be for heart valve surgery, kidney failure (end-stage renal failure), coronary artery bypass graft, stroke, coma, cancer, aorta graft surgery, paralysis, myocardial infarction, total blindness, accident of life-threatening or serious nature, any other illness which can threaten the life as mentioned by the authority in the guidelines, notifications, or circulars from time to time.
  9. In the National Pension System, the NPS account holder shall be allowed to withdraw the amount only a maximum of 3 times during the whole term of the subscription. It is important for the account holder to submit the request to withdraw the amount to the National Pension Scheme trust or central record keeping agency for processing through their nodal office.
  10. If the account holder is suffering from any of the specified illnesses as described in the sub clause (d), the request for withdrawing money may be submitted by any member of the subscriber’s family.

How to choose a pension fund manager?

ICICI Prudential Pension Fund, Kotak Mahindra Pension Fund, LIC Pension Fund, Reliance Capital Pension Fund, UTI Retirement Solutions Pension Fund, SBI Pension Fund, DSP BlackRock Pension Fund, and HDFC Pension Management Company are the eight fund managers who manage the invested money in the National Fund Scheme. In order to find the best NPS fund manager, you should check out the returns of the last three years of every scheme. You can also check the monthly returns available on the official website of NPS.

What are the benefits and features of National Pension Scheme SBI?

You can get your National Pension Scheme SBI account opened at State Bank of India. The minimum entry age for National Pension Scheme SBI is 18 years. The maximum entry age for National Pension Scheme SBI is 60 years. A person has to submit the proof of identity, date of birth, and address along with application form to apply for National Pension Scheme SBI. For opening a Tier I account, the minimum contribution is Rs. 500. For every contribution in the Tier I account, you will have to pay the minimum amount of Rs. 500. The minimum balance of Rs. 6,000 is required in the Tier I account after the completion of every financial year. For opening a Tier II account, the minimum contribution is Rs. 1,000. For every contribution in the Tier II account, you will have to pay the minimum amount of Rs. 250. The minimum balance of Rs. 2,000 is required in the Tier II account after the completion of every financial year. In both accounts of National Pension Scheme SBI including Tier I and Tier II, there should be at least one contribution in a year.

1. National Pension Scheme SBI benefits:

There is the main benefit of National Pension Scheme SBI as per the Swavalamban guidelines approved by the Indian government. All those National Pension Scheme SBI accounts that were opened between 2012 and 2013, 2011 and 2012, and 2010 and 2011 are eligible to receive the benefit of Rs. 1,000 from the Indian government. But the condition for this benefit is that eligibility criteria that have been prescribed should be fulfilled.

2. National Pension Scheme SBI features:

Check out some of the salient features of the National Pension Scheme SBI:

  • National Pension Scheme SBI has two options including Tier I and Tier II. National Pension Scheme SBI Tier I account does not allow you to withdraw an amount unless you reach the age of 60 years. National Pension Scheme SBI Tier II account allows you to withdraw the amount as per your requirement.
  • You can get your account opened at POP-SP or Point of Presence-Service Provider banks who take the subscriber application form and the various documents required. This makes the subscribers registered with the CRA or Central Record Keeping agency. After registration, they are offered a unique number known as PRAN or Permanent Retirement Account Number.
  • PRAN or Permanent Retirement Account Number is required for all the future transactions.

Conclusion:

National Pension Scheme or NPS is a pension scheme sponsored by the Indian government. This scheme was launched in January 2004. Any Indian citizen can join the National Pension Scheme. An NRI can also open an account in National Pension Scheme. Due to any change in the NRI citizenship status, the account can be closed. The minimum entry age required to join the National Pension Scheme is 18 years. The maximum entry age required to join the National Pension Scheme is 60 years. If you are looking for a POP nearby your location then you should check the official website of PFRDA or Pension Fund Regulatory and Development Authority. You will have to fill a subscriber registration form in order to get your account opened. This registration form will be submitted to the POP with some required documents. The documents which you will have to submit with registration form are proof of your birth date, identity, and address. After subscription, you will be issued a card which will have 12-digit unique number known as PRAN or Permanent Retirement Account Number.

ICICI Prudential Pension Fund, Kotak Mahindra Pension Fund, LIC Pension Fund, Reliance Capital Pension Fund, UTI Retirement Solutions Pension Fund, SBI Pension Fund, DSP BlackRock Pension Fund, and HDFC Pension Management Company are the eight fund managers registered with Pension Fund Regulatory and Development Authority. These managers are responsible for managing money invested by the account holders of National Pension Scheme or NPS. The minimum eligibility age for National Pension Scheme SBI is 18 years. The maximum eligibility age for National Pension Scheme SBI is 60 years. There should be at least one contribution per year in both, Tier I account and Tier II account of National Pension Scheme SBI. In the National Pension Scheme SBI for opening a Tier I account, the minimum contribution is Rs. 500. In the National Pension Scheme SBI for opening a Tier II account, the minimum contribution is Rs. 1,000. In National Pension Scheme SBI Tier I, the minimum balance of Rs. 6,000 is required after the completion of every financial year. In the National Pension Scheme SBI Tier II, the minimum balance of Rs. 2,000 is required after the completion of every financial year.

If you are looking for the answers to various questions including:

What is the National Pension Scheme or NPS?

How can I join the National Pension Scheme? 

How can I find a POP near to my location?

What are the different documents that I need to submit along with a registration form to the POP?

What are the types of accounts in the National Pension Scheme or NPS? 

What are the withdrawal rules of National Pension System?

Who are the eight fund managers in the National Pension System or NPS?

How to choose a pension fund manager?

What are the benefits of National Pension Scheme SBI?

What are the features of National Pension Scheme SBI?

 

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