NPS - National Pension System Scheme

You can start your retirement planning and save for your retirement corpus by opening an NPS account online using these simple steps:

1. Visit the NPS Website: Go to the official NPS website or visit a Point of Presence (POP) like a bank for a new NPS Account opening.

2. Choose the type of account: Select the type of pension account between Tier I and Tier II and create an NPS account. Note that a Tier I account is mandatory for opening an NPS account.

3. Select the Pension Fund Manager: There are 11 Pension Fund Managers (PFM) listed under the NPS; choose the preferred one.

4. Select the mode of investment: You can choose between two modes - Auto and Active. If you opt for Auto Choice, your portfolio will be adjusted based on the current trends, and if you go for Active Choice, you can choose the assets yourself.

5. Complete the registration form: Fill out the online registration form by entering your personal details, contact information, and nominee details.

6. Submit KYC documents: Provide Know Your Customer (KYC) documents, which include identity proof, address proof, a photograph, etc.

7. Make the initial pension contribution: Deposit the first pension contribution amount as specified by the chosen type of account. For example, the minimum contribution for a Tier I account is ₹500.

8. Receive PRAN: After you submit your details successfully, you will receive a Permanent Retirement Account Number (PRAN), which is required for future reference.

You can also create an NPS account through the Axis Bank website. Here are the steps to follow:

• Go to Axis Bank’s official website.
• Go to the National Pension System (NPS) page, listed under the dropdown menu of “Explore Products”.
• Click on “Apply Now” and accept the terms. After that, it will take you to a third-party website to complete the registration process.
• Read the instructions carefully and complete the registration using your preferred method. You can complete the registration using:
  • Aadhaar Paperless Offline e-KYC
  • Aadhar or Driving License through Digilocker

The NPS pension plan is a pension reform tool designed to enable every citizen of this country to invest for their retirement and enjoy the benefits at pension maturity. It is a government scheme which offers different models and types of investments for anyone between 18 and 70 years of age.

Your pension payout depends on several factors, such as monthly contributions, annuity purchases, total years of contribution, etc. Additionally, to determine the payout before you finalise your NPS investment, you can do the pension calculation yourself by using the Pension Calculator tool.

While both the investment options are government backed, PPF has a fixed rate of interest, whereas NPS is market-linked with a low risk. However, the returns in NPS are higher than PPF. So, select based on your investment needs.

No, an NPS is not entirely risk-free as it is linked to the market. However, it is governed by the pension regulator, PFRDA, making it a safe investment option.

Additionally, you can opt for Atal Pension Yojana if you wish to earn a guaranteed amount of pension in retirement.

Interest rates depend on factors such as choice of the NPS class, pension contributions, choice of Pension Fund Managers, and type of NPS account. Additionally, the returns are market-linked, so the interest rates vary and may range from 9% to 12% p.a.

A Tier I account is best suited for retirement planning, and a Tier II account enhances your investments and acts as a retirement savings tool. So, depending on your investment goals and needs, you can choose the best type for you.