NPS is a voluntary, defined contribution retirement savings product introduced to promote old age income security.
- Under the NPS, individuals can accumulate a pension corpus during their work life to meet financial needs, post retirement. These contributions would grow and accumulate over the years, depending on the returns earned on the investment made.
- The subscribers may use the accumulated pension wealth under the scheme to purchase a life annuity from a life insurance company. Alternatively, depending on the age of the subscriber, a part of the wealth may be withdrawn as lump-sum.
National Pension System
Any citizen of India desiring to open an NPS account can contact any of the Points of Presence (POPs) appointed by PFRDA.
Under NPS following two types of accounts are available:
- Tier-I account: You shall contribute your savings for retirement into this non-withdrawable account.
- Tier-II account: This is a voluntary savings facility, with an aim to provide window of liquidity. You will be free to withdraw your savings from this account whenever you wish.