Product related FAQs
National Pension System (NPS) is a pension scheme introduced by the government of India for the citizens of India to provide them with a regular source of income after their retirement.
Indian citizens (including NRI and OCI) between the ages of 18 and 70 years can participate in NPS.
There are two types of NPS accounts: Tier 1 and Tier 2. Tier 1 is a savings account, where investors invest for the long term and also save tax while Tier 2 is an investment account with no restrictions to withdraw the funds, investors are free to invest and withdraw as per their needs.
The minimum contribution for NPS is Rs. 500 per annum for Tier 1 and Rs. 250 per transaction for Tier 2
The maturity period of NPS is 60 years or the retirement age of the investor whichever is earlier. Investors can choose to stay invested till the age of 75 years.
Yes, NPS is tax-friendly. Contributions made to NPS are eligible for tax deductions under Section 80C and Section 80CCD (1B) of the Income Tax Act, 1961. The maturity amount is also tax-free at the time of retirement.
The individual has the option to invest in four different assets, these asset classes are -
- Asset class E – Equity and equity-related instruments
- Asset class C – Corporate debt and debt-related instruments
- Asset class G – Government bond and other government back securities
- Asset class A – Alternative investments like Commercial Mortgage-Backed Securities (CMBS), Real Estate Investment Trusts (REITS), Infrastructure Investment Trusts (InvIts), venture capital funds etc.
NPS invests in a mix of assets such as equity, bonds, and alternative investments to ensure adequate returns. It also allows subscribers to choose their investment mix based on their risk appetite and investment goals.
Yes, subscribers can switch between investment options in NPS as per their investment goals and market conditions.
The maximum equity exposure in NPS is 75%.
Active choice allows subscribers to actively manage their investment portfolio by choosing the asset class and fund managers, while auto choice is a passively managed option where investments are allocated based on the investor’s age and risk profile.
An NPS account can be opened through a Point of Presence (POP) or an online platform. You need to provide personal and KYC (Know Your Customer) details, choose an investment option and make an initial contribution to open an NPS account. We as DSP Pension will help you open an NPS account ( link for account opening).
Yes, NPS account can be transferred from one employer to another in case of job change or switch in employment.
Investment related FAQs
The minimum investment limit in NPS is Rs. 500 per annum for Tier 1 and Rs. 250 per transaction for Tier 2. There is no maximum investment limit in NPS.
Yes, NPS can be used as a tax-saving instrument. Contributions made to NPS are eligible for tax deductions under Section 80C and Section 80CCD (1B) of the Income Tax Act, 1961.
Yes, there is a lock-in period for NPS investments. Tier 1 NPS account has a lock-in period of 5 years or until the subscriber reaches 60 years of age ( whichever is earlier), while Tier 2 NPS account has no lock-in period.
NPS is a pension scheme that provides a regular source of income after retirement, while other investment options like mutual funds or fixed deposits are used for wealth creation. NPS also offers a tax-efficient way of saving for retirement.
Yes, NPS investments can be partially withdrawn for specific purposes such as higher education, housing, and medical emergencies as per the prescribed rules and regulations.
No, there is no limit on the number of transactions in NPS. However, a minimum contribution of Rs. 250 per transaction is required for Tier 2 NPS account.
No, NPS investments cannot be pledged as collateral for loans. NPS is a pension scheme and the objective is to provide a regular source of income after retirement.
Safety related and regulatory FAQs
NPS is a regulated investment scheme, and the investments are managed by authorized Pension Fund Managers. The Pension Fund Managers are required to follow the investment guidelines prescribed by the Pension Fund Regulatory and Development Authority (PFRDA). The assets are diversified across various asset classes, including government securities, equity, and corporate bonds, to minimize the risk of investment. However, there is no guarantee of returns, and the investments are subject to market risks.
PFRDA is the regulatory body for NPS and is responsible for protecting the interests of NPS subscribers. PFRDA sets the investment guidelines for Pension Fund Managers, supervises their performance, and ensures compliance with the regulations. PFRDA also provides a grievance redressal mechanism for NPS subscribers and takes appropriate action in case of any violation of regulations by the Pension Fund Managers. In case of any default by the Pension Fund Managers, PFRDA may take action to protect the interests of NPS subscribers, including the transfer of the management of the assets to another Pension Fund Manager. The investments under NPS are under the supervision of the Pension Fund Regulatory and Development Authority (PFRDA), which provides a degree of protection to the investments.
NPS invests in a mix of assets such as equity, bonds, and alternative investments to ensure the safety of investments. The Pension Fund Regulatory and Development Authority (PFRDA) oversees the functioning of NPS to ensure that investments are made in a transparent and regulated manner.
The Pension Fund Regulatory and Development Authority (PFRDA) is the regulator of the National Pension System (NPS). PFRDA's role includes overseeing the functioning of NPS, ensuring that investments are made in a transparent and regulated manner, and protecting the interests of subscribers.
No, PFRDA does not guarantee returns on NPS investments. NPS is a market-linked investment scheme and the returns are dependent on the performance of the underlying assets.
PFRDA sets the guidelines for fund managers in NPS, which include investment objectives, risk management strategies, and performance benchmarks. Fund managers are required to comply with these guidelines and invest in a manner that is in the best interests of subscribers.
Yes, PFRDA can take action against non-compliant fund managers in NPS. PFRDA has the authority to impose penalties, revoke licenses, and take other enforcement action against fund managers that violate the regulations and guidelines set by PFRDA.
PFRDA oversees the functioning of NPS to ensure that investments are made in a transparent and regulated manner. PFRDA also sets guidelines for fund managers and regularly monitors their performance to ensure that investments are safe and secure.
PFRDA has a grievance redressal mechanism in place to handle customer complaints in NPS. Subscribers can raise their complaints with the POP (Point of Presence) or through the NPS Grievance Redressal System on the PFRDA website. PFRDA will take appropriate action to resolve the complaint in a timely and efficient manner.
Tier 2 related FAQs
Tier 2 account in NPS is a voluntary, savings-cum-withdrawal account that is in addition to the mandatory Tier 1 account. Tier 2 account allows subscribers to make additional contributions and make partial withdrawals as per the prescribed rules and regulations.
Any individual who has already opened a Tier 1 NPS account is eligible to open a Tier 2 account. The subscriber must be above the age of 18 years and must be an Indian resident
A minimum contribution of Rs 250 is required to open a Tier 2 account in NPS. Subscribers can make contributions at their convenience.
Yes, the investment choice for a Tier 2 account can be different from a Tier 1 account. Subscribers can choose to invest in different asset classes as per their investment preferences and risk tolerance.
There is no lock-in period for Tier 2 accounts in NPS. Subscribers can make partial withdrawals as per the prescribed rules and regulations.
No, there is no tax benefit on contributions made to Tier 2 account in NPS. Contributions made to Tier 2 account are not eligible for tax deduction under Section 80C of the Income Tax Act.
No there are no charges applicable for opening Tier 2 account.
Yes, Tier 2 account can be closed before maturity. The subscriber can make a request for closing the account through the Point of Presence (POP) along with the required documents. However, there may be certain charges for closing the account.
- Flexibility: Tier 2 account in NPS allows subscribers to make additional contributions and make partial withdrawals as per their convenience.
- No lock-in period: Unlike Tier 1 account, Tier 2 account does not have a lock-in period, which means that subscribers can make partial withdrawals as per their needs.
- Investment choice: Subscribers have the option to choose from different asset classes for their Tier 2 account, based on their investment preference and risk tolerance.
- Portability: Tier 2 account in NPS is portable, which means that subscribers can continue to maintain their account even if they change jobs or migrate to another country.
- Liquidity: Tier 2 account in NPS provides liquidity, which is useful in case of an emergency or other financial needs.
- Systematic Investment Plan (SIP) facility: Subscribers can opt for a Systematic Investment Plan (SIP) in Tier 2 account, which allows them to make regular contributions in a disciplined manner.
- Professional management: Tier 2 account in NPS is managed by professional fund managers, who invest the funds in a diversified portfolio of assets.
- Low cost: NPS is a low-cost investment option, with lower charges compared to other investment options such as mutual funds or insurance plans.
National Pension System (NPS) is a pension scheme introduced by the government of India for the citizens of India to provide them with a regular source of income after their retirement.
Indian citizens (including NRI and OCI) between the ages of 18 and 70 years can participate in NPS.
There are two types of NPS accounts: Tier 1 and Tier 2. Tier 1 is a savings account, where investors invest for the long term and also save tax while Tier 2 is an investment account with no restrictions to withdraw the funds, investors are free to invest and withdraw as per their needs.
The minimum contribution for NPS is Rs. 500 per annum for Tier 1 and Rs. 250 per transaction for Tier 2
The maturity period of NPS is 60 years or the retirement age of the investor whichever is earlier. Investors can choose to stay invested till the age of 75 years.
Yes, NPS is tax-friendly. Contributions made to NPS are eligible for tax deductions under Section 80C and Section 80CCD (1B) of the Income Tax Act, 1961. The maturity amount is also tax-free at the time of retirement.
The individual has the option to invest in four different assets, these asset classes are -
- Asset class E – Equity and equity-related instruments
- Asset class C – Corporate debt and debt-related instruments
- Asset class G – Government bond and other government back securities
- Asset class A – Alternative investments like Commercial Mortgage-Backed Securities (CMBS), Real Estate Investment Trusts (REITS), Infrastructure Investment Trusts (InvIts), venture capital funds etc.
NPS invests in a mix of assets such as equity, bonds, and alternative investments to ensure adequate returns. It also allows subscribers to choose their investment mix based on their risk appetite and investment goals.
Yes, subscribers can switch between investment options in NPS as per their investment goals and market conditions.
The maximum equity exposure in NPS is 75%.
Active choice allows subscribers to actively manage their investment portfolio by choosing the asset class and fund managers, while auto choice is a passively managed option where investments are allocated based on the investor’s age and risk profile.
An NPS account can be opened through a Point of Presence (POP) or an online platform. You need to provide personal and KYC (Know Your Customer) details, choose an investment option and make an initial contribution to open an NPS account. We as DSP Pension will help you open an NPS account ( link for account opening).
Yes, NPS account can be transferred from one employer to another in case of job change or switch in employment.
The minimum investment limit in NPS is Rs. 500 per annum for Tier 1 and Rs. 250 per transaction for Tier 2. There is no maximum investment limit in NPS.
Yes, NPS can be used as a tax-saving instrument. Contributions made to NPS are eligible for tax deductions under Section 80C and Section 80CCD (1B) of the Income Tax Act, 1961.
Yes, there is a lock-in period for NPS investments. Tier 1 NPS account has a lock-in period of 5 years or until the subscriber reaches 60 years of age ( whichever is earlier), while Tier 2 NPS account has no lock-in period.
NPS is a pension scheme that provides a regular source of income after retirement, while other investment options like mutual funds or fixed deposits are used for wealth creation. NPS also offers a tax-efficient way of saving for retirement.
Yes, NPS investments can be partially withdrawn for specific purposes such as higher education, housing, and medical emergencies as per the prescribed rules and regulations.
No, there is no limit on the number of transactions in NPS. However, a minimum contribution of Rs. 250 per transaction is required for Tier 2 NPS account.
No, NPS investments cannot be pledged as collateral for loans. NPS is a pension scheme and the objective is to provide a regular source of income after retirement.
NPS is a regulated investment scheme, and the investments are managed by authorized Pension Fund Managers. The Pension Fund Managers are required to follow the investment guidelines prescribed by the Pension Fund Regulatory and Development Authority (PFRDA). The assets are diversified across various asset classes, including government securities, equity, and corporate bonds, to minimize the risk of investment. However, there is no guarantee of returns, and the investments are subject to market risks.
PFRDA is the regulatory body for NPS and is responsible for protecting the interests of NPS subscribers. PFRDA sets the investment guidelines for Pension Fund Managers, supervises their performance, and ensures compliance with the regulations. PFRDA also provides a grievance redressal mechanism for NPS subscribers and takes appropriate action in case of any violation of regulations by the Pension Fund Managers. In case of any default by the Pension Fund Managers, PFRDA may take action to protect the interests of NPS subscribers, including the transfer of the management of the assets to another Pension Fund Manager. The investments under NPS are under the supervision of the Pension Fund Regulatory and Development Authority (PFRDA), which provides a degree of protection to the investments.
NPS invests in a mix of assets such as equity, bonds, and alternative investments to ensure the safety of investments. The Pension Fund Regulatory and Development Authority (PFRDA) oversees the functioning of NPS to ensure that investments are made in a transparent and regulated manner.
The Pension Fund Regulatory and Development Authority (PFRDA) is the regulator of the National Pension System (NPS). PFRDA's role includes overseeing the functioning of NPS, ensuring that investments are made in a transparent and regulated manner, and protecting the interests of subscribers.
No, PFRDA does not guarantee returns on NPS investments. NPS is a market-linked investment scheme and the returns are dependent on the performance of the underlying assets.
PFRDA sets the guidelines for fund managers in NPS, which include investment objectives, risk management strategies, and performance benchmarks. Fund managers are required to comply with these guidelines and invest in a manner that is in the best interests of subscribers.
Yes, PFRDA can take action against non-compliant fund managers in NPS. PFRDA has the authority to impose penalties, revoke licenses, and take other enforcement action against fund managers that violate the regulations and guidelines set by PFRDA.
PFRDA oversees the functioning of NPS to ensure that investments are made in a transparent and regulated manner. PFRDA also sets guidelines for fund managers and regularly monitors their performance to ensure that investments are safe and secure.
PFRDA has a grievance redressal mechanism in place to handle customer complaints in NPS. Subscribers can raise their complaints with the POP (Point of Presence) or through the NPS Grievance Redressal System on the PFRDA website. PFRDA will take appropriate action to resolve the complaint in a timely and efficient manner.
Tier 2 account in NPS is a voluntary, savings-cum-withdrawal account that is in addition to the mandatory Tier 1 account. Tier 2 account allows subscribers to make additional contributions and make partial withdrawals as per the prescribed rules and regulations.
Any individual who has already opened a Tier 1 NPS account is eligible to open a Tier 2 account. The subscriber must be above the age of 18 years and must be an Indian resident
A minimum contribution of Rs 250 is required to open a Tier 2 account in NPS. Subscribers can make contributions at their convenience.
Yes, the investment choice for a Tier 2 account can be different from a Tier 1 account. Subscribers can choose to invest in different asset classes as per their investment preferences and risk tolerance.
There is no lock-in period for Tier 2 accounts in NPS. Subscribers can make partial withdrawals as per the prescribed rules and regulations.
No, there is no tax benefit on contributions made to Tier 2 account in NPS. Contributions made to Tier 2 account are not eligible for tax deduction under Section 80C of the Income Tax Act.
No there are no charges applicable for opening Tier 2 account.
Yes, Tier 2 account can be closed before maturity. The subscriber can make a request for closing the account through the Point of Presence (POP) along with the required documents. However, there may be certain charges for closing the account.
- Flexibility: Tier 2 account in NPS allows subscribers to make additional contributions and make partial withdrawals as per their convenience.
- No lock-in period: Unlike Tier 1 account, Tier 2 account does not have a lock-in period, which means that subscribers can make partial withdrawals as per their needs.
- Investment choice: Subscribers have the option to choose from different asset classes for their Tier 2 account, based on their investment preference and risk tolerance.
- Portability: Tier 2 account in NPS is portable, which means that subscribers can continue to maintain their account even if they change jobs or migrate to another country.
- Liquidity: Tier 2 account in NPS provides liquidity, which is useful in case of an emergency or other financial needs.
- Systematic Investment Plan (SIP) facility: Subscribers can opt for a Systematic Investment Plan (SIP) in Tier 2 account, which allows them to make regular contributions in a disciplined manner.
- Professional management: Tier 2 account in NPS is managed by professional fund managers, who invest the funds in a diversified portfolio of assets.
- Low cost: NPS is a low-cost investment option, with lower charges compared to other investment options such as mutual funds or insurance plans.