NPS Calculator

NPS Pension Calculator is a financial tool that calculates potential returns on the National Pension Scheme, by inputting factors like age, monthly investment, and expected rate of returns, it estimates future pension, helping investors in informed decision-making for systematic and disciplined investment strategies.

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

Your Age

18 Years 59 Years
Enter Your Age

Monthly Investment

₹500 ₹10L
Enter Investment Per Month

Expected Return on Investment

5% 15%
Expected Return on Investment

Percentage of Corpus Allocated for Pension

40% 100%
Enter Corpus Percentage

Expected Return from Pension

5% 15%
Enter Annuity Return
₹0
Your Monthly Pension
₹0
Your Monthly Pension
Your Pension Calculation
Your Pension Calculation
Total Investment
Returns Earned
Maturity Amount
Maturity Amount split (Lumpsum & Pension)
60%
Lumpsum Amount
At the age of 60 Yrs
40%
Pension Wealth
At the age of 60 Yrs

What is the NPS Calculator?

The National Pension Scheme (NPS) calculator assists in estimating the retirement pension by calculating the monthly contribution. It simplifies retirement planning, helping users determine suitable contributions. The NPS calculator enhances the important aspect of financial foresight for retirement.

By using the National Pension Scheme calculator, you can get an idea about how much to contribute monthly to obtain a suitable corpus post-retirement.

As the importance of planning for retirement becomes increasingly evident, the popularity of the National Pension Scheme calculator is growing. The calculator makes your retirement planning easier by helping you determine the amount you need to contribute. Indian citizens between 18 and 60 are eligible to buy the NPS scheme.

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How to Calculate NPS Online?

Start a stress-free retirement journey with Policybazaar's NPS Calculator online. In just six easy steps, input your age, monthly investment, and expected returns. Customize your pension allocation preferences. The calculator reveals your future monthly pension, lump sum, and pension wealth. 

Follow these steps:

Step 1: Input your current age in years

Step 2: Specify the amount you are willing to invest in the National Pension Scheme every month

Step 3: Provide the expected rate of return on your investments

Step 4: Decide the percentage of the accumulated corpus that you want to allocate for receiving a pension in the future

Step 5: Enter the expected rate of return for the pension phase

Step 6: The NPS return calculator will show you the estimated monthly pension, lump sum amount, and pension wealth

NPS Pension Calculator Formula

The NPS scheme allows subscribers to invest in various pension plans, including Birla Pension Fund, HDFC Pension Fund, LIC Pension Fund, and SBI Pension Fund. The best NPS calculator uses the following pension calculation formula: 

The National Pension Scheme works on the basis of the following formula
A = P (1 + r/n) ^ nt
Terms used in National Pension Scheme Calculator
P
Principal Sum
R
Interest rate per annum
N/n
Number of times interest compounds
T/t
Total tenure

Who can use the National Pension Scheme Calculator?

As per the NPS rule, all Indian citizens between the ages of 18 and 60 are eligible to invest in the pension scheme. Also, the applicant must fulfil the Know Your Customer (KYC) guidelines to invest in NPS. An increasing number of Indians are subscribing to the NPS. In the financial year 2023 alone, the NPS added 170 lakh subscribers.

How to Calculate Pension Amount Using an NPS Return Calculator?

Let us understand the NPS pension calculation with the help of an example:

Mrs. Joshi, a 25-year-old, invests Rs. 10,000 monthly in the National Pension Scheme with a projected 9% interest. Anticipating retirement at 60, she allocates 40% of her corpus for pension, with an expected rate of return of 6%.

Total Investment= ₹42 Lakhs

Returns Earned= ₹2.54 Cr 

Maturity Amount= ₹2.96 Cr

Monthly Pension= ₹59,277

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Invest ₹10K/Month YOU GET ₹1.5 LAKHS* MONTHLY PENSION View Plans
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NPS Interest Rate

The National Pension System doesn't offer a fixed interest rate like other savings schemes. This is because NPS investments are market-linked. This means your returns will depend on how the underlying assets perform in the market. Historically, NPS returns have ranged from 9% to 12% per annum. As compared to other investment options available in the market, NPS offers a profitable return and provides an opportunity to accumulate wealth in the long term.

NPS Calculation for Income Tax

Here's how NPS contributions affect your income tax calculations:

Tax Deductions for Your Contributions:

  • Section 80CCD(1): You can claim a tax deduction for contributions to your NPS Tier I account, up to 10% of your salary (Basic + Dearness Allowance). This deduction falls under the overall Section 80CCE limit of Rs. 1.5 lakh.

  • Section 80CCD(1B): This section offers an additional tax benefit for Tier I NPS accounts. You can deduct an extra Rs. 50,000 on top of the Rs. 1.5 lakh limit under Section 80CCE.

Important Points to Remember for NPS Calculation as per the Old Tax Regime:

  • The total tax deduction for NPS contributions cannot exceed your gross income.

  • Employer contributions to your NPS account (mandatory for government employees, voluntary for most private companies) are also tax-deductible for the employer under Section 80CCD(2). However, this deduction doesn't affect your personal tax calculations.

Benefits at Withdrawal:

  • Upon maturity (after 60 years old), you can withdraw up to 60% of the corpus tax-free.

  • The remaining 40% must be used to purchase an annuity plan, which provides you with a regular income stream. The income from the annuity is taxable as per your applicable tax slab.

How to Calculate NPS for Tier 1 and Tier 2 Accounts?

Here are the details about Tier 1 and Tier 2 accounts to consider while using the NPS pension calculator:

NPS Tier 1 Account

  • Mandatory contributions: For Tier 1 account, a minimum of Rs. 1,000 per year needs to be contributed. There is no maximum limit, but it is recommended that contributions be made regularly to maximize the corpus.

  • Investment Choices: Tier 1 offers various investment options (Asset Classes) like Equity (E), Corporate Debt (C), Government Bonds (G) and Alternative Investment Funds (A). You can choose the asset class based on your risk profile.

NPS Tier 2 Account

  • Voluntary contributions: Tier 2 account is voluntary and allows contributions over and above the Tier 1 mandatory contributions. There is no minimum or maximum limit for Tier 2 contributions.

  • Investment Choices: Similar to Tier 1, Tier 2 also offers various investment options.

NPS Calculator for Government Employees 

Here’s how NPS works for government employees:

    • Increased Government Contribution: A major benefit for government employees is the increased employer contribution. The government contributes 14% of your salary towards your Tier-I NPS account, compared to the 10% offered to private sector employees. 

    • Investment Choice: The Central Government grants its employees the freedom to choose their investment patterns within Tier-I. This allows you to customise your investment strategy based on your risk appetite and retirement goals.

    • Tax Benefits: NPS offers significant tax benefits for both contributions and withdrawals.

      • Lump-Sum Withdrawal: For government employees, the tax exemption on lump-sum withdrawals at retirement has been increased to 40%. This means a larger portion of your accumulated corpus is tax-free.

      • Tier-II Account: Tier-II NPS accounts function like regular savings accounts with the added benefit of tax deductions. Government employees can claim deductions up to Rs. 1,50,000 on their Tier-II contributions under Section 80C of the Income Tax Act, 1961, provided the mandatory 3-year lock-in period is fulfilled.

To get an estimated amount that you can expect to accumulate upon retirement, you can use an NPS pension calculator for government employees.

NPS Annuity Calculator

An NPS annuity calculator is an online tool that helps you estimate the amount of money you can expect to receive at retirement through the National Pension System (NPS) in India. Based on the corpus used to purchase the annuity and the chosen annuity rate, the calculator estimates the monthly pension amount you'll receive after retirement.

Points to Remember:

  • The NPS annuity calculator provides an indicative figure, not a guaranteed amount. Actual returns and annuity rates may vary.

  • It's a valuable tool for retirement planning. It helps you assess if your current contributions are on track to meet your desired retirement income.

Post Office NPS Calculator

The Post Office NPS Calculator is a tool that helps you estimate the amount of money you can expect to receive at retirement through the National Pension Scheme (NPS) offered by India Post.

Here's how it works:

  • You input some basic details like your current age, monthly NPS contribution, and desired investment return rate.

  • The calculator considers factors like the number of years until your retirement and the annuity option you choose upon maturity.

  • It then provides an estimate of two things:

    • The lump sum amount you'll receive at retirement.

    • The monthly pension you can expect after retirement.

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How Much Can You Expect to Receive Upon Retirement?

Several NPS calculators can help you estimate your potential pension corpus. Here are some of the popular options:

  • NPS Calculators by Pension Fund Managers:

  • Other NPS and Retirement Calculators:

    • NPS Annuity Calculator: This tool helps estimate the pension you'll receive after investing in an NPS annuity plan upon retirement. 

    • NPS Tier 1 Calculator & NPS Tier 2 Calculator: If you'd like to estimate returns specifically for Tier 1 or Tier 2 NPS accounts, search for separate calculators. 

FAQs on NPS Calculator

  • Is NPS interest fixed?

    The interest rates for NPS are not fixed; they fluctuate based on market performance.
  • Is there a lock-in period for NPS?

    No, NPS does not have a lock-in period.
  • Is NPS calculated monthly or yearly?

    While contributions to NPS are typically made monthly, the interest accrual and corpus growth are calculated annually.
  • Can I use the NPS calculator for retirement planning?

    Yes, the NPS calculator is a useful tool for estimating your future corpus and pension based on current contributions and expected returns.
  • How can I get a 50,000 pension per month in NPS?

    To get a ₹50,000 monthly pension in NPS, you'll need to make substantial contributions over time and choose investment options wisely. Consulting a financial advisor for a tailored plan is recommended.
  • How do I calculate my NPS?

    Calculating NPS involves considering contributions, investment returns, and annuity rates. Policybazaar National Pension Scheme calculator can help with precise estimations.
  • How do you calculate NPS? Show an example.

    Example: If you invest ₹10,000 monthly in NPS for 30 years, with an average annual return of 8%, your corpus can be calculated using compound interest formulas or seamlessly using the Policybazaar NPS calculator.
  • Is NPS better than PPF?

    Comparing NPS and PPF depends on your financial goals. NPS offers the potential for higher returns but has market risk. PPF is a safer, government-backed option with lower returns but tax benefits. Diversifying between the two can be a balanced approach.
  • Where can I find an NPS calculator?

    There are a number of NPS calculators available online. You can use Policybazaar’s NPS calculator.
  • Is the NPS calculator available for free?

    Yes, the NPS calculator is usually available for free on official websites and financial service providers. You can use it without any cost to estimate your potential pension amount.
  • Can the NPS calculator help me choose the right investment option?

    Yes, the NPS calculator can assist you in choosing the appropriate investment option based on your risk tolerance and retirement goals. It allows you to compare the projected pension amounts for different investment choices within NPS, such as equity, corporate bonds, and government securities.
  • Can I change the input values in the NPS calculator later?

    Yes, you can change the input values in the NPS calculator as and when required. You may update your contribution amount, investment period, or expected returns to see how it affects your projected pension amount.
  • Can I invest in NPS for 10 years?

    NPS scheme allows premature exit after 10 years of investment in the scheme only if you invest 80% of the accumulated corpus for annuity purchasing. Other than this, one can exit the scheme only at superannuation or upon death.
  • Which bank is best for NPS?

    SBI Pension Fund and ICICI Prudential Pension Funds have the best returns for a 3-year term for an NPS scheme subscription.
  • What is the average return of NPS?

    According to past trends, the NPS scheme gave annual returns between 8-10%.
  • What happens to NPS after death?

    According to the regulations made by PFRDA, in case of the death of a subscriber, the nominee or the legal heir is to be paid the full (100%) corpus amount.

*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
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
+Returns Since Inception of LIC Growth Fund
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

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