Indian Overseas Bank National Pension Scheme (NPS)

What is the Indian Overseas Bank National Pension Scheme?

The Indian Overseas Bank National Pension Scheme (NPS) is a voluntary investment plan. Your yearly contributions are invested in equity instruments, corporate bonds, government securities, and alternative investment funds as per your age. You can also choose your own investment apportionment. The fund increases over time as a result of the withdrawal restrictions, and you gain from compound interest by reinvesting investment returns. 

NPS Calculator

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Years

18 Years 59 Years

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₹500 ₹10L

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Expected Return on Investment

%

5% 15%

Expected Return on Investment

Percentage of Corpus Allocated for Pension

%

40% 100%

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Expected Return from Pension

%

5% 15%

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Maturity Amount

Maturity Amount split (Lumpsum & Pension)

60%

Lumpsum Amount

At the age of 60 Yrs

40%

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At the age of 60 Yrs

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Features of the Indian Overseas Bank National Pension Scheme (NPS)

Here are the top features of the Indian Overseas Bank National Pension Scheme (NPS), that make it an ideal pension plan.

• Market-Linked Scheme: As the amount contributed to NPS is invested in various market instruments, the returns of this scheme are based on market performance. The returns are not fixed, but there is a possibility of earning higher returns that fixed rate investments.
• Flexible Fund Allocation: Through the Active Choice mode, you can decide how your funds are invested. You can invest up to 75% of the funds in equity instruments, up to 5% in alternative investments, and up to 100% in government or corporate debt securities.
• Limited Withdrawals: Under the Indian Overseas Bank National Pension Scheme (NPS), you can withdraw 60% of your corpus amount after superannuation. The rest has to be invested in an annuity. However, if your fund value is less than Rs. 5 lakh, you can withdraw the entire amount.

Types of Indian Overseas Bank NPS Accounts

The NPS framework has two categories: Tier I and Tier II. While Tier 1 accounts are mandatory retirement accounts, Tier II accounts are optional investment accounts.

• Tier 1 NPS Account: This is a permanent retirement account with limited withdrawals. You can claim tax benefits on the contributions you make to it. The minimum yearly contribution is Rs. 1000.
• Tier II NPS Account: This is a freely withdrawable NPS account. You can open this account only if you have an active Tier 1 account. There is no minimum yearly contribution for this account.

Who is Eligible for the Indian Overseas Bank National Pension Scheme?

If you want to invest in the Indian Overseas Bank National Pension Scheme (NPS), check whether you meet the eligibility criteria of the scheme.

• Investors between the ages of 18 and 70 who are Indian citizens (residents or non-residents) may invest in NPS. 
• Under NPS, non-resident Indians are not permitted to open a Tier II account.
• People of Indian Origin (POI) and Hindu Undivided Families (HUF) are not allowed to invest in this scheme.
• When opening an NPS account with the Indian Overseas Bank, you must contribute at least Rs. 1,000. 

Charges Levied by Indian Overseas Bank on NPS Accounts

The Indian Overseas Bank acts as a Point of Presence (POP) for the NPS scheme and levies the following charges for its services.

Tax Benefits under the Indian Overseas Bank National Pension Scheme

Tax savings are an important advantage of investing in the Indian Overseas Bank NPS scheme. The tax advantages offered by both income tax regimes are outlined here.

Note: 'Salary' is the total of basic salary and dearness allowance for the calculation of your NPS deduction.

How to Invest in the Indian Overseas Bank National Pension Scheme? Step-by-step Guide

You can conveniently invest in the Indian Overseas Bank National Pension Scheme (NPS) online through the following process.

• Go to the official website of the Indian Overseas Bank.
• Navigate to the 'Personal Banking' section and click on 'Government Business'. Find 'NPS-National Pension System' from the available investment options.
• Find the 'NPS Online Registration' option and click on the corresponding link.
• You will be redirected to the online NPS platform of the bank.
• Click on the 'Registration' button at the bottom.
• Enter your personal information in the correct fields and upload digital copies of KYC documents like PAN and Aadhaar card.
• Verify your identity before submitting the application using a One Time Password or OTP.

In case you are not comfortable with using technology, you can always subscribe to NPS through the nearest branch of the Indian Overseas Bank. You can submit a paper application along with physical copies of KYC documents.

Conclusion

A small contribution to the Indian Overseas Bank National Pension Scheme (NPS) today will turn into a significant corpus fund by the time you retire. This scheme encourages you to save consistently for the future. It offers the security of government scheme while generating competitive market-linked returns through its pension funds.