ICICI Bank National Pension Scheme (NPS)

The ICICI Bank National Pension Scheme (NPS) is a retirement savings scheme, which provides lucrative returns through market linked investments. Moreover, along with the benefit of wealth creation, the NPS scheme also offers the benefit of tax savings.

As a government backed savings scheme, NPS aims to secure the financial future of the individuals after retirement. While choosing the right investment option, one should make sure that the investment options they choose should:

  • Provide good returns
  • Offers tax benefit
  • The returns are inflation adjusted

The ICICI NPS scheme offers all these benefits. Let’s read further to know in details about the various aspects of ICICI Bank NPS.

Features of ICICI Bank NPS Scheme

Here are some of the salient features of ICICI NPS.

Flexibility

The NPS offers  different investment options and choice of Pension Fund Manager for planning the investment growth in a reasonable manner. The investors can switch between different investment options or fund managers as per their requirement and suitability, subject to specific regulatory restrictions.

Moreover, the ICICI NPS scheme also offers the flexibility to choose between Active or Auto choice for distribution. If an investor choose the option of Active choice then they must indicate the percentage distribution between gilt, corporate and equity. The maximum of 75% of investment is allowed in equity.

Simple Process to Open Account

While opening a the NPS account, a Permanent Retirement Account Number (PRAN) is offered to the subscribers. The  NPS account is divided into two categories I.e.

  • Tier-I Account- This is permanent retirement account, which does not allow any withdrawal and the accumulations are deposited and invested as per the option chosen by the subscriber.
  • Tier-II Account- This is Voluntary withdrawal account which is allowed only in case the subscriber has an active Tier 1 account in his/her name. The withdrawals are allowed as per the requirement of the subscriber or as and when claimed.

Regulated

The Pension Fund Regulatory and Development Authority of India (PFRDA) regulated the NPS scheme and as a government backed savings scheme this is one of the safest and lucrative investment option in the long-term.

How NPS Works?

  • In NPS scheme, the savings of an individual is pooled in a pension fund.
  • The PFRDA invests these funds and the professional fund managers regulates these funds as per the approved guidelines of investment in the diversified portfolio that comprises corporate debentures, government bonds, bills and shares.
  • Based on the returns generates on the investment made, the contributed sum will accumulate and grow over the years.
  • While exiting the NPS account, the investors can use the accumulated sum to purchase annuity or can withdraw a part of accumulated wealth as lump-sum.

The PFRDA has appointed ICICI Bank as  one of the Point of Presence (POP) for the NPS.

Eligibility Criteria of ICICI NPS Scheme

Any Indian resident  between the age of minimum 18 years to a maximum of 65 years can open the NPS account.

Tax Benefit

The contribution made towards the NPS scheme up to the maximum limit of Rs. 1.5 lakh is applicable for tax exemption U/S 80C  of the Income Tax Act. Moreover,the subscriber can claim any additional self-contribution up to Rs. 50,000 U/S 80CCD (1B)  of the IT Act. Therefore, the scheme allows a total tax deduction up to Rs 2 lakh.

Online Process to Invest in ICICI Bank NPS Account

An individual can start investing the NPS account through eNPS portal offered by the government. The individual can invest online if their ICICI Bank account is linked to their PAN card. Moreover, they can also register for net banking facility offered by ICICI to open online NPS account. Let’s take a look at the process to follow.

  • Go to the eNPS portal https://enps.nsdl.com/eNPS/NationalPensionSystem.html and choose NPS option.
  • Choose the registration option to register yourself.
  • Enter the required details in the registration form like name, address, PAN card, Phone number, age, email ID, etc.
  • An OTP will be sent to the registered mobile number with the PAN card.
  • To complete the process of verification enter the OTP.
  • Choose the investment account as per your suitability.
  • Choose the Pension Fund Manager .
  • Choose the investment strategy from Auto or active choice.
  • Enter the beneficiary/ nominee details.
  • Upload the KYC documents which are required while opening the NPS account.
  • Make online contribution to open the NPS account and complete the process of registration.
  • Once the payment is done, the registration form is displayed on screen containing the details.
  • The PRAN (Permanent Retirement Account Number) is generated after the registration and contribution of the scheme is completed.
  • Download the form attach the KYC documents and Photograph on the form and mail it to the CRA (Central Recordkeeping Agency) for completing the process of account opening. The form should be sent within 90 days from opening the online account.

Documents Required While Opening ICICI Bank NPS Account

Here are the documents required while opening the ICICI NPS account.

  • Identity proof like Passport, PAN Card, etc.
  • Age Proof like Passport, Voter ID, Aadhaar Card.
  • Address Proof like Aadhaar Card, Utility Bills, Driving License, etc.
Written By: PolicyBazaar - Updated: 05 April 2021
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