National Pension Scheme-An excellent scheme for the retirees
One of the most important schemes incorporated by the government in India is NPS, which offers pension benefits for each and every individual having a profession in this country. It cannot be denied that “pension” was previously available for the government employees only and employees or individuals working anywhere else, other than government organizations were not allowed any pension at all. But, this situation changed completely with the introduction of NPS. In this scheme, any employed individual, be it government, private or even the self employed individuals shall also be able to have pension benefits.
Mechanism of NPS
This is definitely a beneficial program initialized by the government. The person who joins NPS shall be known as the subscriber and you need to open an account with CRA. The NPS is based on very simple mechanism. Investors are required to contribute a small amount of money every month within their NPS account and this monthly contribution shall be invested in different avenues according to the risk profile and preference of the investor. And on retirement, a part of that corpus can be withdrawn as lump sum, while the balance shall be paid out as pension annuity. The NPS system is absolutely portable, since every individual under NPS program is identified through a unique PRAN, and it remains the same even if the employee gets transferred in another office.
Lead a comfortable life after retirement
The scheme of NPS is a complete new scheme since before this scheme there was no pension scheme for private or self employed individuals. Pension plans are important because it offers security and stability after a long professional career. And when people do not have the capability to work on a daily basis, to offer a monthly secured source of income is the motto of this scheme. The NPS ensures that retired individuals are able to lead a comfortable life without compromising their standard of living. The NPS is absolutely a transparent and cost effective system where you are able to contribute a certain amount of your income as investment within the pension fund schemes and you can also know about the value of your investment on a daily basis.
The complete format of NPS
In the Tier I account, the subscribers shall contribute for a non-withdrawable account. But you can have premature withdrawals before you attain the age of 60 years if you complete 15 years of service.
On the tier II account, it will be a voluntary savings account from which, the subscribers are completely free for withdrawing their savings any time he/she desires. This is identical to a savings bank account. For depositing to NPS scheme through online, you need to go through CAMS or the ICICIDirect.