Indian Bank NPS Calculator

What is the Indian Bank NPS Calculator?

Indian Bank NPS Calculator is a tool that enables customers to estimate the amount of pension benefits from the National Pension Scheme. For government NPS subscribers, up to 60% of the final maturity amount can be withdrawn as a lump sum, while the remaining 40% must be invested in annuity plans to receive a monthly pension. For non-government subscribers, withdrawal limits are governed by the latest NPS exit rules.

The calculator helps you to calculate the sum of money you would likely have at retirement based on the amount contributed, duration of investment, and the assumed rate of return. It also estimates the monthly pension through the application of standard annuity allocation rules at retirement.

How Does the Indian Bank NPS Calculator Work?

The Indian Bank NPS Calculator works on the principle of compound growth to estimate long-term retirement savings. It calculates how regular contributions grow over time based on an assumed rate of return and investment duration.

The calculator applies the standard compound interest formula:

Consider an investor who is planning to retire under the National Pension System (NPS).

The investor starts his investment at the age of 35 and will retire when he is 60. There is a contribution of ₹6,500 every month with a supposed annual growth of 8.5%.

So,

• Investment Duration: 25 years
• Total Contribution: ₹6,500 × 12 × 25 = ₹19,50,000

The estimated amount of the retirement fund after this period would be around ₹70 lakh to ₹75 lakh through long-term compounding.

At retirement, government NPS subscribers may withdraw up to 60% of the corpus as a lump sum, which is approximately ₹42 - 45 lakh. The other 40% or ₹28 - 30 lakh will go to the purchase of an annuity.

Depending upon the current level of annuity rates and the option taken, the annuity may offer a monthly pension ranging between ₹14,000 - ₹17,000.

Note: Withdrawal proportions for non-government subscribers may differ as per prevailing NPS exit norms.

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 Indian Bank NPS Calculator?

To calculate your projected retirement corpus and pension benefits on the NPS calculator, follow the steps below:

• Step 1: Enter Your Current Age - Choose your current age to set the starting point of investment.
• Step 2: Choose Your Retirement Age - Select the age at which you will retire in order to calculate the number of years that you will invest.
• Step 3: Add Your NPS Contribution Amount - Enter the amount that you plan to contribute to the National Pension System monthly or annually.
• Step 4: Select the Expected Rate of Return - Choose an assumed annual rate of return on the basis of the long-term trends in the performance of the NPS.
• Step 5: Set the Annuity Allocation Percentage - Determine how much retirement corpus will be used to purchase an annuity.
• Step 6: Review the Projected Results - See the projected corpus of retirement, lump-sum withdrawal, value of annuity, and projected monthly pension.

Benefits of an Indian Bank NPS Calculator

The National Pension Scheme calculator enables the investor to:

• Visualise Clear Retirement Corpus: The calculator gives a clear estimate of the size of the corpus and pension, with a visual representation of the final payout under the National Pension Scheme.
• Set Realistic Contribution Planning: It helps the user determine the adequate amount of contribution to make monthly or annually in line with the retirement plans, income level, and period they wish to invest it.
• Investment Duration: The user is able to compare the outcome of different retirement ages to understand how the investment period influences the corpus and pension received.
• Informed Pension Decisions: The tool helps in making a better decision by showing how the annuity distribution and the contribution amounts affect the monthly income after retirement.

Tax Implications on Your NPS Returns

The National Pension Scheme provides tax deductions in different sections of the Income Tax Act, which contributes to tax efficiency in addition to creating retirement savings. The major tax benefits of NPS are listed below:

Key Takeaways

The NPS calculator is used to estimate a retirement corpus and monthly pension under the Indian Bank NPS Scheme based on the age, amount contributed, and projected returns. It allows users to compare various contributions and retirement plans and make long-term planning more organised. The calculator is designed to facilitate both the salaried and government employees. In addition to the retirement projections, knowledge of the available tax deductions provided under Sections 80CCD(1), 80CCD(1B), and 80CCD(2) will further enhance the overall retirement outcome.