AU Small Finance Bank NPS Calculator

What is the AU Small Finance Bank NPS Calculator?

The AU Small Finance Bank NPS Calculator is a calculator that assists in determining the estimated benefits of retirement investments in NPS based on the contribution amount, investment tenure, and assumed returns. It portrays important NPS characteristics like partial withdrawals after 3 years under certain conditions and flexibility in withdrawals using Tier II accounts. 

Government subscribers are permitted to take up to 60% of the accumulated corpus at superannuation, the remainder 40% being invested in an annuity, and non-government subscribers are permitted to take an 80% lump-sum withdrawal, and only 20% of that sum must be invested in an annuity to provide a regular monthly payment.

How Does the AU Small Finance Bank NPS Calculator Work?

The AU Small Finance Bank NPS Calculator works on the principle of compound growth to project long-term retirement savings. It calculates how regular contributions grow over time using an assumed rate of return and the total investment period.

The calculator uses the standard compound interest formula:

Consider a government employee planning retirement through the National Pension System.

At 30, a government worker starts with a target to retire at 60 and invest with an expected yearly return of 9% and contribute ₹5,000 monthly.

• Investment Duration: 30 years
• Total Contribution: ₹5,000 × 12 × 30 = ₹18,00,000

According to long-term compounding, the AU Small Finance bank NPS calculator estimates the calculation of the retirement corpus to be about ₹85 lakh to ₹95 lakh.

At retirement:

• As a lump sum, up to 60% of the corpus, approximately ₹51 - ₹57 lakh, can be withdrawn.
  
  
• The rest of 40%, which is about ₹34 - ₹38 lakh, is invested in an annuity.

This annuity can give a monthly pension of ₹18,000 - ₹22,000, based on current annuity rates and the choice at retirement.

Now, take the case of a non-government worker intending to invest in a retirement fund using the National Pension Scheme (NPS).

A non-government worker starts investing at 30 and intends to retire at 60, and contributes ₹5,000 a month with a considered annual rate of 9%.

• Investment Duration: 30 years
• Total Contribution: ₹5,000 × 12 × 30 = ₹18,00,000

According to long-term compounding, the calculation of the retirement corpus under AU Small Finance Bank NPS can be estimated to be about ₹85 lakh to ₹95 lakh.

At retirement:

• A lump sum of up to 80% of the corpus, approximately ₹68 - ₹76 lakh, may be withdrawn.
  
  
• The other 20%, or ₹17 - ₹19 lakh, is put in an annuity.

This annuity can offer a monthly payment of ₹8,000 to ₹12,000, based on the current rates of annuity and the choice made at retirement.

NPS Calculator

Your Age

Years

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

View Plans

₹0

Your Monthly Pension

View Plans 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

View Plans

How to Use the AU Small Finance Bank NPS Calculator?

To calculate your retirement corpus and pension using the NPS calculator, you may follow these steps:

• Step 1: The first step is to enter your current age in order to determine the starting point of investments.
• Step 2: Choose the age at which you expect to retire so that you know how long to invest.
• Step 3: Input your monthly or annual NPS contribution amount.
• Step 4: Select a presumed rate of return as per long-term NPS performance.
• Step 5: Choose the percentage of the corpus to be put into an annuity.
• Step 6: Check the estimated monthly pension, lump-sum, retirement corpus and value of the annuity.

Benefits of the AU Small Finance Bank NPS Calculator

The National Pension Scheme calculator offers several advantages for retirement planning:

• Simple to Navigate: Only needs simple requirements like age, amount of contribution, and predictions on returns, which makes it easy even for first time NPS investors.
  
  
• Instant Estimates: Provides quick calculations of retirement corpus and monthly pension without the need for manual calculations.
  
  
• Flexible Inputs: You can vary contribution level, retirement age, and return assumptions in scenarios to compare them.
  
  
• Better Financial Planning: Helps investors anticipate how fast their contributions grow over time and match savings to retirement plans.
  
  
• Free to Use: It is free on the net, so one can run the analyses of retirement plans as many times as one wants.

Tax Implications on Your NPS Returns

The National Pension Scheme is eligible for tax deduction under the Income Tax Act, as per the limits:

Key Takeaways

AU Small Finance Bank NPS Calculator lets investors estimate their retirement corpus and monthly pension depending on the age, amount of contribution and time of investment. It reflects the main NPS characteristics, including partial withdrawal after 3 years, optional Tier II withdrawals and compulsory annuity allocation upon retirement. The calculator helps in systematic and effective retirement planning by comparing the levels of contribution, investment horizon, the growth assumptions, and tax benefits by Section 80CCD(1), 80CCD(1B) and 80CCD(2).