MoneyWiseGuide
Calculate your retirement corpus and monthly pension with National Pension Scheme
Minimum 40% mandatory
Available for withdrawal
Used for pension purchase
Lifetime monthly income
Enter your details to calculate NPS retirement corpus
Choose from Equity (E), Corporate Bonds (C), or Government Securities (G) based on your risk appetite. You can also opt for Auto or Active choice.
Partial withdrawals allowed after 3 years (max 25% of contributions). Premature exit after 10 years with 80% annuity purchase.
Tier-1 is the primary pension account with lock-in until retirement (age 60) and offers tax benefits under Section 80C and 80CCD. Tier-2 is a voluntary savings account with no lock-in period, allowing withdrawals anytime, but with limited tax benefits only for government employees under Section 80C.
NPS offers triple tax benefits: (1) Deduction up to ₹1.5 lakh under Section 80C, (2) Additional ₹50,000 deduction under Section 80CCD(1B), (3) Employer's contribution up to 10% of salary under Section 80CCD(2). At maturity, 60% lump sum withdrawal and annuity income portions have specific tax treatments.
Partial withdrawals are allowed after 3 years of account opening, limited to 25% of your contributions, for specific purposes like children's education, marriage, or medical treatment. Premature exit is allowed after 10 years, but you must use at least 80% to purchase an annuity; only 20% can be taken as lump sum.
At age 60, you must use at least 40% of your corpus to purchase an annuity that provides regular pension. The remaining 60% can be withdrawn as lump sum (tax-free). You can opt to purchase annuity with up to 100% of the corpus for higher pension income.
NPS invests in a mix of equity (E), corporate bonds (C), government securities (G), and alternative investments (A). You can choose Active Choice (select your own asset allocation) or Auto Choice (lifecycle-based allocation). Historical returns have ranged from 9-12% annually, but returns are market-linked and not guaranteed.
Any Indian citizen aged 18-70 years can open an NPS account. NRIs are also eligible. Government employees are automatically enrolled, while private sector employees and self-employed individuals can voluntarily join. You need a valid KYC (Aadhaar, PAN) to open an account.
NPS has very low charges: Fund management fee is 0.01% for government employees and 0.09% for others (one of the lowest globally). Account maintenance charge is ₹100-150 per year. Initial account opening and transaction charges may apply through Points of Presence (POPs).
Yes, you can switch your Pension Fund Manager (PFM) once a year at no cost. You can also change your investment choice (asset allocation) once a year. Multiple switches may attract nominal charges. This flexibility allows you to optimize returns based on fund performance.