It is a security scheme by the central government. This pension program is open to employees from the private, public and the unorganized sectors. If anybody interested to contribute in Tier I and Tier II account, then one has to deposit the amount with duly filled NPS Contribution Instruction Slip by visiting eNPS website to make NPS contribution.
|Particulars||NPS Tier-I Account||NPS Tier-Iii Account|
|Minimum NPS Contribution||Rs. 500 or Rs. 1000 p.a.||Rs. 250|
|Maximum NPS Contribution||No limit||No limit|
A part of NPS goes to equities and offers returns that are higher than PPF. This scheme has delivered 8% to 10% annualized returns. In NPS you can also change your fund manager.
With a 50% cap on equity exposure, it stabilizes the risk of investors. NPS has a higher earning potential than other fixed income schemes.
After retirement, you can’t withdraw the entire fund and this will help you in the future. 40% of the corpus pays you a regular pension.
It has flexible rules in which you can withdraw up to 25% for certain purposes. These include children’s higher education or wedding, buying/building a house or medical treatment of family/self, among others.
|NPS||8% to 10% expected||Till retirement||Market-related risks|
|ELSS||12% to 15% expected||3 years||Market-related risks|
|PPF||8.1% guaranteed||15 years||Risk-free|
|FD||7% to 9% guaranteed||5 years||Risk-free|
Must Read: PROS AND CONS OF NEW PENSION SYSTEM
Under the rules, government sector employees automatically got into their pension account by the government. Hence NPS contribution is common in government employees but less common among private sector employees.
Therefore if you are not a government employee then you can get great returns by investing in NPS. So with the help of the above article, you can know the new rules and the NPS contribution.
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