Bank of India National Pension Scheme (NPS)

What is the Bank of India National Pension Scheme?

The Bank of India National Pension Scheme (NPS) is a retirement planning scheme managed by Pension Fund Regulatory and Development Authority. The Bank of India acts as a POP (Point of Presence) and facilitates the investment. Investors make voluntary contributions to the scheme, which are invested in various instruments. You can choose whether you want to predominantly invest in equity instruments, government instruments, alternative investment funds, or corporate bonds. Once you turn 60, a fixed pension is paid out each month from a corpus fund that has been accumulated over the years.

NPS Calculator

Your Age

Years

18 Years 59 Years

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Monthly Investment

₹

₹500 ₹10L

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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%

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₹0

Your Monthly Pension

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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

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Features of the Bank of India National Pension Scheme (NPS)

Here are the top features of the BOI National Pension Scheme that make this an attractive investment option for planning your retirement.

• 24/7 Online Access: The Bank of India has designed an efficient digital platform for its NPS investors. The platform allows you to access your NPS account online at any time and from anywhere.
• Partial Withdrawal Allowed: You can partially withdraw your NPS corpus for specified purposes like education or marriage of children, treatment of specified diseases, self-development activities, and starting your own venture. To be eligible for this, you must be subscribed to NPS for at least 3 years, and the withdrawal should not exceed 25% of your contributions to the scheme.
• Diversified Investments: Your NPS corpus is invested in a variety of investments to increase the safety of your funds by avoiding reliance on one investment type. Through active management, you can choose the allocation ratio of your funds in various investments.

Types of Bank of India NPS Accounts

The Bank of India offers two sub-accounts under the NPS scheme. These accounts have different purposes and withdrawal rules.

• Tier I Account: This is a retirement and pension account, and it is mandatory to open it to subscribe to the NPS scheme. Only limited withdrawals are available from this account, and tax benefits are available on the contributions made to it. 
• Tier II Account: This is an optional pension account that you can open along with a Tier 1 Account. It is an optional savings account, and you can withdraw your funds at any time. There is no minimum yearly contribution for this account.

Who is Eligible for the Bank of India National Pension Scheme?

Here are the eligibility requirements prescribed by the Bank of India for NPS subscribers. Go through the requirements thoroughly to see whether you are eligible to invest in this scheme.

• Indian citizens who are 18 to 70 years old are eligible for the NPS scheme.
• Resident, non-resident, and overseas citizens (OCI) of India can invest in this scheme.
• NPS investors must make a minimum initial contribution of Rs. 500 to open a Tier 1 Account and Rs. 1000 to open a Tier 2 Account. 
• It is mandatory to comply with the KYC norms prescribed by the BOI for investing in this scheme.

Charges Levied by the Bank of India on NPS Accounts

Since the Bank of India facilitates the investment in NPS, it levies the following charges on NPS account holders. A GST of 18% is charged on these amounts and they are collected directly from your NPS contributions.

Tax Benefits under the Bank of India National Pension Scheme

If you are investing in the Bank of India NPS scheme, make sure you understand and claim the tax benefits available under the Income Tax Act 1961.

How to Invest in the Bank of India National Pension Scheme? Step-by-step Guide

You can invest in the NPS scheme online or offline. Here is a step-by-step guide for investing.

• Submit the NPS registration form to the bank online through NSDL PROTEAN or K-Fintech. Alternatively, you can submit a registration form offline at the nearest Bank of India branch.
• Provide the KYC documents required by the Bank of India. This includes your identity proof, address proof, etc.
• Make the minimum contribution to the scheme as per the type of your NPS account.

Conclusion

While you are working, you must save and invest funds as and when possible, to make your retirement easier. The Bank of India National Pension Scheme (NPS), a low-cost voluntary contribution scheme, is an excellent starting point. The scheme encourages consistent savings and provides a safe and stable income source after retirement.