DCB Bank NPS

What is DCB Bank NPS?

The National Pension Scheme provides subscribers with a retirement corpus by contributing regularly during their working years. The ultimate corpus value will be determined by the contribution amount, investment option of choice and market performance with time.

At retirement or exit, a sum of the accumulated corpus may be withdrawn in the form of a lump sum, the remainder of the balance should be used to buy an annuity that will provide a periodical amount of pension.

The Pension Fund Regulatory and Development Authority regulates the National Pension Scheme. It was implemented in 2004 for the employees of the Central Government and for all citizens in 2009 through the All Citizen Model. Any resident Indians, NRIs, and OCIs between ages of 18 to 70 years are eligible to open an NPS account,depending on the recommended KYC requirements.

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%

Enter Annuity Return

₹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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Types of DCB Bank NPS Accounts

Each subscriber under DCB Bank NPS is allotted a unique Permanent Retirement Account Number (PRAN). The same PRAN operates two types of NPS accounts: Tier I and Tier II.

• Tier I Account: This is the mandatory retirement account. Contributions are locked in until exit conditions are met. Tax benefits under the National Pension Scheme tax benefit provisions are available only on investments made in this account, and withdrawals are regulated by NPS rules.
• Tier II Account: This is an optional investment account with higher liquidity. Subscribers may withdraw funds at any time without exit restrictions. An active Tier I account is mandatory to open a Tier II account.

The key operational requirements for maintaining Tier I and Tier II NPS accounts are outlined below:

Features of DCB Bank NPS

The National Pension Scheme accessed through DCB Bank operates in line with PFRDA-prescribed guidelines and offers the following features:

• Portability Across Employment and Location: NPS accounts are portable among jobs, industries, and cities without the necessity to open up a new account.
• Multiple Contribution Channels: NPS contribution payments and service requests can be made by subscribers either at the branches of DCB Bank or authorised digital channels.
• Partial Withdrawal Facility: Particularly after three years, a portion of up to 25% of the self contributions of the subscriber can be withdrawn with certain conditions.
• Centralised Grievance Redressal: Complaints made by the subscribers are resolved using the Central Grievance Management System within a specified time limit.
• Choice of Pension Fund and Investment Pattern:

The following could be chosen as investment options by the subscribers:

• Active Choice: Maximum equity of 75% (reducing after 50 years), Corporate Bonds up to 100%, Government Securities up to 100% and Alternate Assets up to 5%.
• Auto Choice – Life Cycle Funds: LC25 (Conservative), LC50 (Moderate - default), and LC75 (Aggressive), whereby the assets are automatically adjusted according to age.

Applicable Charges Under DCB Bank NPS

Rates charged on NPS services provided by DCB Bank as a point of presence are in line with the PFRDA guidelines.

Note: Charges prescribed by PFRDA apply separately.

Documents Required to Open a DCB Bank NPS Account

Applicants should provide the filled Subscriber Registration Form with the following KYC documents:

• Recent passport-size photograph
• PAN card
• Proof of address
• Bank account proof (Savings / NRE / NRO)
• Identity document (Indian passport for NRIs / OCI card for OCIs)

How to Open a DCB Bank NPS Account?

A DCB Bank NPS account can be opened through online or offline modes, based on the subscriber’s preference.

Online Process

Subscribers can open a DCB Bank NPS account online by completing a simple registration process through the bank’s NetBanking platform.

• Access NetBanking: Log in to the DCB Bank NetBanking portal
• Select NPS Registration: Choose the National Pension Scheme registration option
• Complete KYC: Complete the PAN-based electronic verification
• Provide Details: Enter personal, nominee, and bank account details
• Make Contribution: Pay the initial NPS contribution online
• PRAN Generation: PRAN is generated upon successful submission

Offline Process

Subscribers may also open a DCB Bank NPS account offline by visiting an authorised bank branch.

• Visit Branch: Go to the nearest DCB Bank branch
• Collect Form: Obtain and complete the Subscriber Registration Form
• Submit Documents: Provide KYC documents and photographs
• Choose Investment Options: Select pension fund manager and investment option
• Initial Contribution: Pay via cash, cheque, or account transfer
• PRAN Issuance: PRAN is issued after verification

Withdrawal Rules for DCB Bank NPS Account

Withdrawals from a DCB Bank NPS account are governed by PFRDA regulations and vary based on age, exit type, and corpus value

Partial Withdrawal (Tier I – All Subscribers)

• Permitted after completion of three years from the date of NPS account opening.
• Withdrawal is limited to a maximum of 25% of the subscriber’s own contributions.
• Allowed only for purposes specified under PFRDA withdrawal guidelines.

Exit Before Age 60

Government Subscribers

• Up to 20% of accumulated pension wealth may be withdrawn as a lump sum.
• A minimum of 80% of the corpus must be utilised to purchase an annuity.
• Full lump-sum withdrawal is permitted if the total corpus is ₹5 lakh or below.

Non-Government Subscribers

• Subscribers may withdraw up to 20% of the accumulated pension corpus as a lump sum.
• At least 80% of the accumulated corpus must be mandatorily used for annuity purchase.
• Full withdrawal is allowed if the total accumulated corpus does not exceed ₹5 lakh.

Exit at Age 60 or Superannuation

Government Subscribers

• Up to most of the total pension wealth can be withdrawn as a lump sum.
• A minimum of 40% of the accumulated corpus must be used to purchase an annuity.
• 100% lump-sum withdrawal is permitted if the total corpus is ₹8 lakh or below.

Non-Government Subscribers

• Up to 80% of the accumulated pension wealth may be withdrawn as a lump sum.
• At least 20% of the corpus must be utilised for annuity purchase.
• An 80:20 withdrawal structure is mandatory when the corpus exceeds ₹12 lakh.

Joining NPS at or After Age 60

• Subscribers may withdraw up to 80% of the accumulated pension wealth as a lump sum.
• A minimum of 20% of the corpus must be utilised to purchase an annuity.
• Full lump-sum withdrawal is allowed if the total accumulated corpus is ₹12 lakh or below.

On the Subscriber’s Death

• The entire accumulated pension wealth is paid to the nominee or legal heir.
• There is no mandatory requirement to purchase an annuity in such cases.

Tax Implications on DCB Bank NPS

Subscribers can claim National Pension Scheme tax benefit as per prevailing income tax rules.

Note: NPS income in the form of an annuity is taxable according to the relevant income tax brackets. The taxation of withdrawal is under the existing income tax regulations upon exit.

Key Takeaways

DCB bank NPS is a government-sponsored retirement scheme controlled by PFRDA, and provides disciplined, tax-efficient, and long-term savings. It has a mandatory Tier I account that has tax benefits and an optional Tier II account to provide liquidity. Subscribers are able to select investment options, pension fund managers, and have portability across jobs and locations. The DCB Bank NPS Calculator can also be used to estimate future corpus and pension savings to support retirement planning.