Best National Pension Scheme to Invest

The National Pension Scheme (NPS) is a voluntary long-term retirement investment designed to help individuals build a secure financial future. Subscribers can make regular contributions throughout their working years to accumulate a retirement corpus.

Upon retirement, a portion of the accumulated corpus can be withdrawn as a lump sum, while the remaining amount is used to purchase an annuity that provides a stable and regular post-retirement income.

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Benefits of Investing in National Pension Scheme

Build a secure retirement with one of India's most trusted pension investment options.

Voluntary Scheme

It is an investment option available for citizens employed in the public as well.

Low-Cost Scheme

Costs associated with the best NPS funds are very low.

Simplicity

To subscribe to the best NPS funds, an applicant has to open an account at any of the PFRDA appointed Points of Presence (POP) and get a Permanent Retirement Account Number (PRAN).

Portability

Individuals can operate an NPS fund account from anywhere in the country and the contribution can be deposited in any of the POPs.

Aspects of National Pension Scheme

Citizen Model

The individual is the single holder of the NPS scheme . Decisions regarding investment choices, scheme provider and annuity service provider are taken entirely by the individual.

Corporate Model

The individual and the employer can both contribute to the individual's NPS scheme. The company will have to register for corporate NPS so that the employees can avail the benefit of the corporate model.

There are two sub-accounts available while opening an NPS funds in India:

Tier I Account

Pension and retirement account with withdrawal restrictions.
Minimum deposit of INR 500 is required to open the account.
Minimum contribution of INR 1,000 needs to be done per year.
Minimum of 1 contribution needs to be deposited per year.

Tier II Account

Being a voluntary savings facility, the subscriber is free to withdraw the NPS funds savings whenever funds are required.
Minimum deposit of INR 1,000 is required to open the account.
Minimum total transactions for a year can be INR 250.
There is no cap on the maximum amount deposited in the account.

Active Choice

The individual decides how the money should be invested in different asset classes. With the best pension funds for NPS an individual can choose to allocate contributed funds in different percentages with a 50% maximum cap on Equity.

Asset Class E: Invests 50% in stocks.
Asset Class C: Invests in Fixed Income instruments other than government securities.
Asset Class G:Invests only in Government Securities.

Auto Choice

The best NPS fund automatically invests money based on the age of the individual. This is a default option for the individuals as per the system.

As per the Income Tax Act 1961, the NPS funds attract income tax benefits:

Under Section 80CCD(1B): Individuals contributing to National Pension Scheme investment in Tier I account can claim tax deductions of up to INR 50,000/- under Section 80CCD(1). This benefit is over and above the tax exemption of INR 1,50,000 under Section 80C. Under Section 80CCD(2): Employers contributing in Tier I investment in the NPS scheme are eligible for tax deduction up to 14% for central government contribution and 10% for others. This deduction falls over and above the deductions applicable under Section 80C. Withdrawal of 25% of Tier I contribution in the pension fund for NPS is exempt from tax. Lump-sum NPS fund withdrawal of up to 40% after the individual turns 60 is exempt from tax.