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28.9%First documentNPS Withdrawal Rules - How to Withdraw from NPS?Open original ↗
Second documentNational Pension Scheme (NPS): How to Invest & Maximise ReturnsOpen original ↗
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Conclusion
Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.
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Retirement - Top Selling Plans
We bring you a collection of popular Canara HSBC life insurance plans. Forget the dusty brochures and endless offline visits! Dive into the features of our top-selling online insurance plans and buy the one that meets your goals and requirements. You and your wallet will be thankful in the future as we brighten up your financial future with these plans.
How to Withdraw from NPS?
Also Read - NPS Returns
What are the Types of Accounts in the National Pension System?
Recommended Reading - NPS Returns
Partial NPS Withdrawal Rules
You can withdraw up to 60% of your NPS investment on retirement. The remaining 40% must be used to buy an annuity. The conditions are as follows:
What are the Types of Accounts in the National Pension System?
Tier I NPS Account - Tier I is a retirement account. On opening a Tier I NPS account, you are allotted a 12-digit permanent retirement account number (PRAN). You can open this account with a minimum contribution of ₹500. However, to keep the account active, you need to contribute at least ₹ 1,000 in a financial year. There is no cap on the maximum investment you can make in your Tier I account. The money you invest in this account is locked until you turn 60. On turning 60, you can withdraw 60% of the corpus as a lump sum. You must use the balance of 40% of the corpus to buy an annuity plan from an insurance company that will pay you a monthly pension. Under Section 80CCD of the Income Tax Act 1961, the investments you make in your Tier I NPS account qualify for tax exemption.
Building Tax-Free Annuities
The remaining 40% of the corpus must be invested in an annuity plan. If you must, you can invest the Rs 40 lakhs in a pension plan right away and continue to withdraw your lump sum corpus over an extended period.
What are the Types of Accounts in the National Pension System?
There is no cap on the maximum investment you can make in your Tier I account. The money you invest in this account is locked until you turn 60. On turning 60, you can withdraw 60% of the corpus as a lump sum. You must use the balance of 40% of the corpus to buy an annuity plan from an insurance company that will pay you a monthly pension.
Using ULIP & PPF
Both plans allow partial withdrawals after five years of investment. However, you can give the corpus 10 years or more to grow further, since you already have a pension plan running.
What are the Alternatives to NPS?
Bonus additions for long-term investors aid your folio growth. Life cover improves the safety of your family in your absence. Partial withdrawals are tax-free and available after five years of starting the plan.