NPS , New Pension Scheme , A detailed Explanation

POSTED BY Jagoinvestor ON May 2, 2009 COMMENTS (403)

Today we will be talking about the “New Pension Scheme” Launched by Govt. of India.

What is NPS?

Its a pension system recently launched by Govt of India from 1st April, 2009.. You can regularly invest your money in this and get a lump sum at your retirement and a fixed monthly income for the lifetime . It will work almost the same way as Private Pension Schemes.

new pension scheme

Until now the pension schemes was available to Govt employees and employees of Big companies who has Provident fund facility. Any other person had to go with Private Pension schemes provided by Insurance Companies. IT as not a govt scheme for common person, With NPS now its a common person gateway to Pension Schemes.

Read previous post which was a guest post by Nooresh Merani on “How does a day trader looks like”Features

– No upper limit of Investment
– Minimum limit of 6,000 per year (Rs.500 per month).
– Annual Fees of .00009% (90 paisa for Rs.10,000) for Managing the fund.
– Tax benefit under sec 80C.
– Any Indian citizen between 18 and 55 years can invest in NPS.

Read other details below.

NPS Bodies

– Regulator : The one who will regulate the NPS System .
– Fund Managers : Who will invest the money
– Point of Presence : Responsible for Sales and Marketing .
– Central Record Keeping Agency : Responsible for all the document Keeping work (Record Keeper)

Lets see each of them In detail now .

Who will Regulate NPS?

PFRDA(Pension Fund Regulatory and Development Authority) will monitor and regulate all the activities under NPS. It checks how your money in invested and makes sure that the fund managers are following the rules and guidelines.

Its just like “SEBI for Stock Market” .

Who are the Fund Managers?

There will be 6 Fund houses appointed by Government to manage the funds under NPS. You can choose any one of them to be your Fund Managers. They are :

1. SBI Pension Funds Private Limited.
2. UTI Retirement Solutions Limited.
3. ICICI Prudential Pension Funds Management Company Limited.
4. Religare Pension Fund Limited.
5. IDFC Pension Funds Management Company Limited.
6. Kotak Mahindra Pension Fund Limited.

They will take all the decisions of where the money received under NPS should be invested in the best possible way considering all the rules and regulations set by PFRDA.

Watch this video to know about national pension scheme:

Who are Point of Presence?

The following entities have been approved by PFRDA for appointment as Points of Presence (POPs) under the New Pension System for all citizens other than Government employees covered under NPS.

1. Allahabad Bank
2. Axis Bank Ltd
3. Bajaj Allianz General Insurance Co Ltd
4. Central Bank of India
5. Citibank N.A
6. Computer Age Management Services Private Limited
7. ICICI Bank Ltd
8. IDBI Bank Ltd
9. IL&FS Securities Services Ltd
10. Kotak Mahindra Bank Limited
11. LIC of India
12. Oriental Bank of Commerce
13. Reliance Capital Ltd
14. State Bank of Bikaner & Jaipur
15. State Bank of Hyderabad
16. State Bank of India
17. State Bank of Indore
18. State Bank of Mysore
19. State Bank of Patiala
20. State Bank of Travancore
21. The South Indian Bank Ltd
22. Union Bank of India
23. UTI Asset Management Company Ltd

Who will be the CRA?

As per the website of PFRDA there is a Contact of negotiation is underway and NSDL is expected to be appointed as the CRA. there were other bodies too who wanted to be CRA, but the most suitable of all is CSDL. You can see them as the back office for maintaining records, administration and customer service functions.

What are the Steps of Investment?

  1. Visit a point of presence (PoP), fill up the prescribed form with the required documents.
  2. Once registered, CRA will send you a Permanent Retirement Account Number (PRAN). This will be unique to every person.
  3. Select your Amount and Investment Option.

Investment Options and Structure

Structure wise they are very similar to ULIP’s or ULPP’s from Investment Point of View . You have different kind of funds options with different exposure to –

– Equity Instruments
– Corporate Debt
– Fixed Income Instruments
– Govt Securities.

Different Options

Risky option : The higher allocation in this option will be in Equity. To decrease the risk, Equity Investment is allowed only to invest in Index funds which tracks Sensex or Nifty. Also the equity exposure is caped at 50%.

Moderate : IN this options Main exposure would be Corporate debt and Fixed income securities with some exposure in Equity and Govt securities. It will be moderately risky and rewarding.

Safe : In this option mainly the investment will be done in Govt securities, and very little will be invested in Equity.

There will be a Default option , under which the allocation will be decided as per your age, where Equity Allocation will be high in the start and then it will come down as your age increases . You can also decide your own asset allocation as per your Risk appetite


There are different kind of Costs in NPS.

– Fund management charges of .0009% per Annam, which is excellent if compared to ULPP’s or Mutual funds charges .

– Annual Maintenance charges of Rs.350 and Rs.10 per transaction to CRA (soon, it will be Rs.280 per year, Rs.6 for per transaction).

– Rs.40 for registration with PoP and Rs.20 per transaction with them.

– There are other small costs too, lets leave it for now.

Taxation Issue

Sadly, As per the current law, the amount received at the end from NPS would be taxable, PFRDA is trying hard with govt to exempt the tax. You will get the 80C benefits on the amount invested in NPS.

UPDATE May 3, 2009

“Under following circumstances your account may be closed before attaining retirement age?

– death
– account value reduces to zero
– change in citizenship status.

Thanks to Viral for bringing up this point
Read NPS FAQ here


As per my views, Its a good initiative from Govt to introduce a Pension Scheme which will give common people a chance to invest in Pension schemes which is from Govt.

One important thing to understand and note is that Even though its a pension scheme, the returns are not guaranteed. It can vary drastically depending on your asset allocation and how you choose the fund options.

Other Negative point at this point is that the amount received at the end would be taxable which can have adverse affect on the return potential. But I am sure soon govt will make the final amount received non-taxable.

Currently I don’t rate it at par with PPF or EPF. At this point it would be wise to invest money in this if you have any money left over after your PPF and EPF contribution. Waiting for some more time before taking a call on this would be worthwile . Overall NPS passes πŸ™‚

Question for you

– Are you personally impressed by NPS and will you invest in NPS?
– What else govt can make changes in NPS to make it attractive to you?

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403 replies on this article “NPS , New Pension Scheme , A detailed Explanation”

  1. Minal Mehta says:

    Hello, Manish, the article was to the point. I was looking for blogs on NPS which can guide me on how I can invest in NPS. Your blog on NPS investment has really helped me so thank you for that.Now that I know about NPS my life after retirement is sorted. Overall NPS is the best investmentz option for the futuree.

    1. Jagoinvestor says:

      Great to hear that Minal

  2. Ansuman says:

    Hi Manish,
    I have a few questions around the NPS Scheme:
    1. Can one avail extended tax-benefits of this scheme by opening a NPS account in spouse’s name? (assuming spouse is not employed/has no income)
    2. The returns are taxable as of today with NPS. However, wouldn’t that be the case even-if the returns were tax-free (i.e., wouldn’t one be required to pay tax anyway as Capital Gains or Income from other sources when the corpus amount gets credited to bank account)?
    Can you please help clarify based on your expert understanding of this scheme.

    1. I need to study more on NPS and update this article .

  3. PRATIPAL says:

    in my present govt (job duration 19 months ) job there is EPF and in my new govt job (joining in next month) there is NPS … there any option to transfer money from EPF of Job 1 to NPS of job 2 ?

    1. Hi PRATIPAL

      To withdraw the EPF, you can always fill up the form 19 and submit it to EPFO office. After few months try to follow up with RTI


  4. ManjunathSherikar says:

    Hi Manish,
    How to select the Funds? Like there are 5 Fund managers. Should we choose the Funds with low NAV or should go with High NAV? Currntly I have Selected ICICI Pension Fund as it is having higher NAV. Please do guide on this.

    1. NAV does not matter at all . Why do you want NPS at the first place, I would recommend mutual funds


      1. Manjunath says:

        eNPS has given extra 50k bracket for tax savings. Will you really recommend it ??

        1. I dont recommend that

  5. Aditya says:

    Can we give a SIP like mandate to State Bank to invest in NPS on a monthly basis? Havent come across this feature in SBI’s retail banking website. Anyone have insight?

    1. Hi Aditya

      I am not aware of that !

      1. Aditya says:

        Okay, Thanks Manish

  6. Arun says:

    Hi Manish ji,

    Above details are changed /revised, please rewrite about NPS.Your articles are always very informative and simple to absorb,hope we will get clear picture.

    1. Yes, thats on my checklist. But I would be able to do it only after some months !

  7. PradeepAgrawal says:

    HI Manish,
    Is it compulsory to invest in NPS under 80CCD1 or 80CCD2, before taking tax advantage of 80CCD(1B).
    Actually I have already exhausted 80C by EPF, PPF, ELSS and LICs. Do I need to make compulsory contribution to 80C before 80CCD(1B)

    1. No its not like that .. you can just invest in NPS if you wish !

  8. praveenkumartiwari says:

    I worked for more than 3 years in state govt. department where my monthly contribution was deducted under NPS tier -1 account and they issued me PRAN. After switching job now I am working in PSU where monthly contribution deducts under EPFO and for the same UAN is issued to me by present employer. I want to transfer my all corpus from NPS to EPFO. Is there any transfer claim form available with my present employer to transfer NPS to EPFO ?

    1. Hi praveenkumartiwari

      Thanks for asking your question. However, I dont think I am eligible to answer your query as its either out of scope of my knowledge or its not related to money matter directly


  9. rajkumar says:

    Sir I’m a employee in scr railway I didn’t get pran kit how I open it…

  10. mani says:

    HI ..while trying to new registration through eNPS page..there is showing 2 pages one for individual subscriber another one corporate subscriber..can you explain about?also when i choose the corporate subscriber it will ask corporate head office details can i get this details.

    1. I am not very clear on that as of now . WIll check and write an article in future !

  11. Devinder says:

    This Group is For All India Centre Govt and State Govt Employees of New Pension Scheme Only & to Fight Against New Pension Scheme.
    All India Centre Govt and State Govt Employees who come under NPS and joined after 01.01.2004 should join this group. So that we can unite against new pension scheme.

    This group is all about New Pension Scheme only and to give more and more information about NPS/CPF to Govt Employees of Centre Govt and State Govts.

  12. Vinay says:

    Have a question Manish. Oflate I have seen a few private employers offering NPS too (though my current company only offers EPF).
    If I open a personal NPS account as of now, would I able to merge that with an employer sponsored NPS account in the future (when I switch job)?

    1. I am not very sure on that !

  13. Ashish says:

    Dear Manish,
    I was having an individual account in UTI ITSL, who surrendered it to an SBI branch….
    Now my account has been frozen for some time due to non- contribution and when I approached that SBI branch for unfreezing my account, the employees of that branch turned out to be completely unaware about NPS and had no clue about what to do….

    Now I am having trouble in getting my account unfrozen due to this….I have sent a mail to CRA but no reply has been received till date
    please advise asap please…

    1. Hi Ashish

      This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that


  14. SubhashMittal says:

    Dear Manish,
    Being working in an MNC ,I already have EPF account (for 12% of Basic) and SuperAnnuation account (for 15% of Basic)..totaling 27% .
    Now Question is that Am I still eligible for NPS as I am already on cap of 27% for any pension instrument as per Govt act?
    Pls advise.
    Subhash Mittal

    1. There is no link between NPS and EPF or Super annuation, you can do all of them

      1. SubhashMittal says:

        Thanks.. Dear Manish

  15. Nikhil says:

    Hi Manish

    I have two queries regarding NPS:

    (i) It says that min contribution to start the account is 500/-. If I start the account today (Feb 2016), do I need to meet the minimum requirements of 6000 per year as well ? So, given my scenario do I need to invest a further 5500/- by March end ?

    (ii) 6000 is the minimum investment required per year. Does this include transaction charges ?
    (a) of my bank (POP)
    (b) of CRA (NSDL)
    So, should I invest 6000 OR “6000 + bank charges” OR “6000 + bank charges + NSDL charges” ?


    1. This is a very old article on NPS and the rules might have changed. I Will redo the article very soon !

  16. Rohit says:

    Dear Manish,

    My Current status is NRI, Is it possible for an NRI to open a NPS account.
    If yes then from where do I have to pay money from my India account or NRE.
    Returns on NPS investment do i have to pay tax in india

  17. VikramSharma says:

    I have NPS account in my name. Can my wife also contribute to that account from her income and take the tax rebate on additional 50000 Rs under section 80CCD. Please guide.

    1. I dont think she can do in that same account. She has to open her own account for that !

  18. Raj says:

    Hi Manish

    First of all – Thanks for writing such a good and informative article for an awareness.

    My Question : I understood that Withdrawal amount is taxable at current moment, In future possible Government approve for tax exceptions, In this possibility do you think whoever already opted NPS now those will be also comes under tax free corpus ? I understand this will be deciding factor by govornment, since having doubt so thought to ask you. I wanted to open NPS account and have faith that gov. will take action to make tax free on vested date, but only point of fear is if later on they declare whoever opened NPS before YR 2015-2016 for those vested amount will be taxable and later on won’t.

    Sounds fishy question but thought to ask you πŸ™‚

    1. I am as clueless as you are on this πŸ™‚ . I dont think that the full amount on maturity will be tax free

      1. Amarnath says:

        I got confused…
        Amount during investment is non-taxable(may be 80CCD) but sum+interest is taxable during withdraw right?
        I didn’t understand how this scheme is tax beneficial?

  19. RAVISHANKAR says:

    Sir, i am working for a corporate company and currently PF is being deducted from my salary. Can i join the NPS scheme.

    1. Yes, you can join NPS if you wish

  20. pramil says:

    I am a govt. Servent . I want to invest in new pension scheme to take benefit on contribution u/s 80CCD(iB) in addition of tax rebate on contribution u/s 80C,80CCC,80CCD Rs. 150000. Please tell me Can I get this additional rebate ?

    1. Yes, you can get extra 50k apart from the 1.5 lacs rebate

  21. Raj says:

    Dear Sir,
    In reference to your article for NPS scheme ,I want to know If I have both Tier-1 & Tier -2 account and in tier 1 mandatory Rs.6000 invested .If I invest Rs.44000 in Tier-2 account .

    1.Will this tier-2 invested amount will be tax exempted under 80CCD?
    2.Will I get exemption of Rs.50000 for financial Year ?
    3. If I withdraw Rs.44000 from tier-2 account after a year ,how withdrawal amount be taxed ?

    1. Hi Raj

      I am still researching on NPS and At this moment I cant answer this . Will publish an article related to this


    2. Nikhil says:

      Hi Raj,

      Only investments in Tier-I are tax exempt. You will get exemption of only 6000/- for the FY.

      I am not sure how withdrawal amount will be taxed.

  22. ravi says:

    Sir i was in postal dep i work there 10month.. now im working in income tax dep… during the postal service i aply for NPS… now can i aply second time income tax dep.. i have hidden my previous job from new EMP.. pls suggest me.. 8290005552

    1. Hi ravi

      I am not clear on what is your question. Please repeat it with more clarity


      1. ravi says:

        sir mene postal dep main 10 month ki service ki hai or waha se non tech redign lekar ab income tax join kiya or income tax main mene previous Job Hide ki h.. ab problem h ke postal wala pran no. de to kese kyyki income tax m job hide ki h… ya fir income tax m fir se pran ke liye apply kiya jaye.. agar dusr baar pran NPS ke liye apply kiya to kya problem aayegi…

        1. Hi ravi

          Thanks for asking your question. However we do not have answer to your question.


        2. Mahesh says:

          Hi Ravi,

          As PAN is single document for identification per person similarly PRAN would be only one per person.


  23. neera says:

    i am right now unemployed but have open nps account. My query is i am soon going to join psu bank and i have heard i will have yo open nps account there too. so can i have two account ?

  24. Neenu says:

    Dear Sir,
    I served a public sector bank for 3 years and is moving abroad in 2months. What are the withdrawal options?

  25. jothi says:

    Hi ,

    I have been working in a private sector bank in India for 3 years. I left the job as i had to move to Australia with my husband. We are planning to settle here in Australia. I wish to completely exit from NPS scheme as i wont be working in India hereafter. I was informed i will be getting only 20% as lump sum and rest will be invested and can be withdrawn only after the age of 60 . Is there any option to withdraw the 80% amount also by declaring my NRI status? Please clarify me on that.

    1. Yes, you cant withdraw full amount from NPS

  26. Suryakant says:

    I had opened NPS account in 2010 at Bellary Karnataka (Alankit). Now I have shifted to Mumbai. How do I transfer my account ? To whom do I post the UOS shifting application form ? Also I have lost all passwords for accessing my account online. What should I do to access it once again.
    Can I transfer my account to any bank like SBI or Axis bank ? Or it is mandatory to stick to Alankit branches in Mumbai.
    Kindly help.

    1. Hi Suryakant

      I suggest that you now take the RTI route. You can file the RTI and ask your queries to them. THey are bound to reply you on your queries.

      Its a bit long cut, but works well


  27. abhishek says:

    Dear Mr. Chauhan,

    I resigned from the govt after 5 months of service. I came back home and started working for Private sector. Later I got my PRAN card through post. I did not pay any attention to it. I don’t even know what amount of contribution from my 5 months salary was gone to the Pension scheme and I don’t even know that account number. I just have my PRAN card with me as a memory of government service. Now 5 years later I want to invest in a pension scheme.

    Using the PRAN card, can I open a new account and start investing or I need some clearance form government?

    I don’t remember taking up any investment plan while I was in government. How do I find out whether my money was invested somewhere and what is the account number?

    Waiting for your reply!


    1. Hi abhishek

      I suggest that you now take the RTI route. You can file the RTI and ask your queries to them. THey are bound to reply you on your queries.

      Its a bit long cut, but works well


  28. yogesh says:

    sir, i have resign my govt job on 27 june 2015 and join new govt job on 1 july 2015. i have not inform my new employer about my previous job in service book , now my should i disclosed to my new employer about old pran detail , or should i will make a new pran no

    1. I belive you should give old PRAN only !

  29. Record says:

    Dear Mr. Manish chauhan,

    I have deposited certain amount in NPS. At the time of opneing NPS. they did not given any record book for the deposit.

    How can i keep record for it ?

    1. I am not sure on that. You must have got something atleast, like login password or passbook or NPS number ?

      1. Record says:

        Yes, I got the NPS number..

        1. Record says:

          How can i login using only NPS number ? How can i see my deposited money balance ?


  30. NIRMAL FRANCIS says:

    I have resigned from a psu bank .
    how can u withdraw the money from nps account incase of resignation?
    The a/c is frozen .

    1. You cant . NPS is a long term product and you will get money at the time of retirement

  31. vivek says:

    sir my age is 32 if i invest 5000 per month in secure manner in nps at the age of 60 what will be the amount of pension i will get im working for a govt org

    1. Hi Vivek

      You can expect a good amount as pension later.

  32. Arnabi says:

    Sir, I already have a EPF with my previous employer and recently I have resigned from that company and now I’m about to join a public sector unit, where NPS is mandatory. I haven’t withdrawn any amount from my P.F. and it is still active. Will there be any problem with the generation of PRAN card with my new employer? And does a public sector company have both EPF scheme and NPS scheme? Please reply

    1. No there wont be any issue, you can have EPF and NPS both at the same time !

  33. RAO says:


    1. I am not sure what happens in case you miss a payment

  34. Jyoti Bajaj says:

    I am 27 years old. My salary is 12000 per month. can you tell me the best way to invest for future.Please tell me . I am confused.

    1. What is the risk appetite you want to take ?

  35. Manjula.V says:

    Hi,i am a group A officer serving in state govt.i already have NPS account which has many years contribution to it. In 2014 i got transferred to Nigam (Karnataka neeravari nigam ltd) which is not deducting my monthly NPS contribution and some discussions is going in govt level.itseems that SBM/SBI is having NPS contributions.Wanted to know how to invest my money to bank

    1. Hi Manjula.V

      I suggest that you now take the RTI route. You can file the RTI and ask your queries to them. THey are bound to reply you on your queries.

      Its a bit long cut, but works well


  36. Dibyendu Mazumder says:


    I am working in Pvt sector. I have EPF scheme from last 3 yrs. Am I join NPS scheme.


    Dibyendu Mazumder

  37. Poonam says:

    I am Poonam private employee i wants join this scheme could you please explain the what is the online processor of this scheme nd benfits also.please revert

    1. Poonam – I suggest go to a bank and they will help you with procedure !

  38. ratnesh says:

    Hi Manish,
    I am working with a private company. Can I open a NPS account with any bank and give it to my employer? Is there an additional 50k exemption for NPS on and above 150k for 80C? How it is different form pension fund offered by various fund houses like Reliance Pension fund?

    1. Yes its above and over 1.5 lacs , you can open it anywhere

  39. Imtiyaz says:

    I got my PRAN Card through “alankit assignments limited” now i am confused where to pay the premium amount at alankit assignments limited or any other bank please suggest. also how can i change my aggregator plz suggest

    1. Check it with them only

  40. SONIA says:

    I was working in a bank , now i have resigned and now i want to convert my NPS A/C from Corporate to Indivudual, please guide me what are the formalities bcoz i have not done any transanction in my a/c in this financial year, if i will not do any entry with in this month my a/c will be deactivated.

    1. Hi SONIA

      The question asked by you is beyond our scope. Its suggested that you hire an expert on the issue and pay them for the advice.


  41. dhruba says:

    i’m doing job in Airtel, want to open PRAN card. so please help.

  42. prakash says:

    sir is there any facility in nps that we can take advance or loan from our contribution like kgid, gpf and lic..

    reply from you is appreciable,

    1. I am not very sure on that !

  43. srikanth says:

    i need adress of NPS office in hyderabad and how to take the agent id in NPs

  44. sagar says:

    nps against loan possible any minimum sevice period required

  45. simeen khan says:


    I was an ex-employee of SBI. Joined bank in 2010 and in 2013 i resigned from my job. I have two querries. One is bank paid me only my contribution of pf and not the bank’s contribution, saying that service less than 5 yrs don’t get contributory pf amount. Is that correct? My second question is about NPS, Can i withdraw my NPS as now i am no more in service? If yes how can i and for that also i will get only my contribution?

    1. Hi Simeen

      Bank has to pay their contribution to you . They cant keep it . complain to EPFO on this.

      Also Your cant withdraw from NPS , its not related to your job like EPF !

      1. simeen khan says:

        Where i can contact to EPFO? Can u help me

        1. You will get all details on their website !

  46. Santoshkumar says:

    Sir,IF ,I am 30 yrs old self employed person and have 4 lakhs yearly then which account is preferred for me MAIN OR LITE.??
    MEANS which will yield better at the end.
    What are tth exact differences between investment made by funds manager?
    What are the facilities regarding partial withdrawal?

    1. You dont need a LITE one . Go for main

  47. Mehul Jani says:

    I have one question for the scheme,

    As per my knowledge under this scheme if person dies before the retirement age i.e. before the age of 60 years than total corpus fund as on date (with interest etc) will be given to his nominee , right ??

    and if survive up to the 60 years of than his monthly pension will start but afte that of he dies at the age of 62 years than what ,

    he enjoyed pension for 24 months only whether his nominee will get balance corpus fund ?

    also up to what age he will get pension ?

    please explain,

    Mehul Jani

    1. Thats true , the pension will be there just for the surviving years !

  48. Amit says:


    Can you please explain me
    If I deposit 100 rs per month from the ege of 25 year then after 60 how much amout I can receive. ?

    1. There is no calculation like that !

  49. prashant gautam says:

    hi manish
    i am a 2012 december batch National Insurance company ltd employee, the company deducts 10% of basic + DA from salary but we have not yet received any PRAN number.
    after enquiry it was informed that a NPS related case is ongoing in madras high court and kerala high court and til their verdict is out no NPS fund managers will be selected and no PRAN number shall be issued.
    nealy 10000 new employees are in same problem.
    we do not know the forum to post our grievances and we do not know who will solve these issues.
    kindly provide some solution.

    1. Hi Prashant

      THe best thing you can do is use RTI as the tool to ask your questions to govt department

  50. Amar Kumar says:

    I want to take the franchisee for PRAN Card and for this I was been seeing so many agencies on offering franchisee for this so,in this regard I want to know whether these agencies are good or absolutely fake,please help me in this regard at your earliest

  51. TUTU PRADHAN says:

    This scheme is very good.

    1. Thanks for your views !

  52. T D Mohan Kumar says:

    NPS scheme is good but how many of Indians are aware of this scheme. Moreover, Government may understand that the scheme is for the poor and medium class in India. The cost deduction from the investor like (i) Registration & transaction charges, (ii) Fund Management Charges, (iii) Annual Maintenance Charges, (iv) Transaction charges to CRA etc. should have been avoided. In most cases this is a long term deposit and the Government is taking advantage of the deposit amount. It will be encouraged that if a nominal percentage of amount be deducted from the Income generated out of the deposit amount.
    Further, the NPS scheme to be popularized by public awareness.

    1. Thanks for sharing your view on NPS ,what are your ideas on making it popular ?

      1. T D Mohan Kumar says:

        In my opinion best way to make it popular is :- (i) advertise the scheme through medias like TV, radio, net etc. (ii) Experts discussion in the DD. (iii) Highlight the major benefits in advertisements. (iv) Fix notices in every Banks and Post Offices where the NPS accounts can be opened. (v) Affix notice in every fair price shops (Where supplying government ration items). (vi) Arrange enrollment campaigns in Exhibitions in cities.

        I expect other viewers give more ideas.

        1. Hmm.. I think some of the ideas are already implemented ..

  53. says:

    a student of 22yrs old also eligible for investments using pocket money?

  54. Deep says:

    I want to know as per current law is NPS is under 80c or outside 80c?
    The reason because I am asking this question is there were some presentation from Kotak Mahindra in our office & they say if we do it from corporate or direct deduction from Salary it would be outside 80c

    1. NSP comes under 80C for individuals , apart from that even employer can claim deduction if they are investing in NPS for their employees !

  55. pritam das sharma says:

    I am a govt bank po , having tier-1 NPS.. Now I planning to resign from bank..plz help me by informing that how can I get back my nps investment till date.

    1. I dont think you can get it back before retirement .

  56. Gaurav says:

    I want to calculate the maturity amount of NPS.
    if i invest 6000 pm till 30 years.
    and increase the investment by 10% each year
    like in first year invest 6000 pm
    in second year: invest 6600 pm and so on… till 35 years

    1. You cant calculate it this way . there are many things involved !

    2. Nikhil says:

      Hi Gaurav,

      You need to do some mathematics in order to derive the exact amount.

      I wrote a similar article sometime back on EMI and EPF. You can check the EPF section where I have assumed that your contribution increases by a fixed percentage each year. Pls see the article:

      PS: You will need familiarity with 10th class maths!


    1. Thanks for the link Tapan !

  57. dharamvir says:

    how work in nps with legally

  58. diptiranjan nayak says:

    I want to change nominee in my nps a/c. What can i do for this please suggest.

  59. Rajesh Parasher says:

    Dear Mr. Manish,

    My wife who has opted for PRAN (SBI Pension fund scheme E, C, G) in 2011, was expired last year in (Aug 2013), due to illness. Even after writing to NSDL in Nov 2013. I received no reply from NSDL. I visited Post office Sarojini nagar, and they have not much information about the scheme and Benefits of this scheme. Since My wife expired, (who wanted to be benefited by the scheme) were not much aware of scheme. Now i would like to know.

    1. What is the procedure to claim ?
    2. How much time will it take to get the claim?
    3. Will I be entitled for Pension or can continue the scheme by transferring it in my
    4. There is no clear cut instruction on website or to POP office.
    5. Your forum seems to through some lite on my issue as well as will educate lot of people on this forum, who are keep to opt for this New Pension Scheme by Govt. of India.
    with regards

    Rajesh Parasher
    Mehrauli, New Delhi

    1. Hi Rajesh

      This needs to be discussed on our forum – please ask a question here –

  60. shreyavadara says:

    if i resign my current job will pran cancels automatically so a new pran number will be activated by another org ?plz help me friends ?

    1. I am not very sure on this .. make sure you ask this on our forum –

  61. shreyavadara says:

    i am working in central govt.i got pran no also.i am selected in another govt org.without noc i have selected in interview .After resigning i will join in new problem is that in new job they will provide me a new pran but database in it shows will it already exists my details.please help me .i want to get a fresh job will it provide me new pran

  62. shahid hussain says:

    nps servise active trru to goverment

  63. triveni says:

    please guide me as to how to close my PRAN account and withdraw my money?

      1. shreya says:

        ya how to close pran account .Please help

  64. VIKAS PHARNE says:

    Dear Sir,
    I have invested in NPS through local agent, I have received my PRAN Card also, now
    i want to pay my installment, i tried to call that agent but he is not picking up the call.

    Please advise how can i pay the installment, any other option is there to pay installment.


    1. I dont think you should rely on Agent for paying premium , you should do that online .. try searching for this on internet or ask here –

      1. Vikas says:

        Thanks Manish,
        But i have already searched on lots of sites but didn’t find any solution about to pay installment.

        1. In that case please open a thread on our forum – . I can almost commit that you should get an answer !

  65. Krish says:

    Hi Manish,

    Nice article, as always! πŸ™‚

    I have opened Nps account and my employer was deducting the money to deposit to my nps account. But I now resigned and pursuing higher studies and planning to maintain the account by depositing min amount till I complete my education.

    My doubt is, how will I deposit the amount? Can I transfer online through net banking options? I have my PRAN card with me and my savings account is with ICICI.

    Thanks in advance.


    1. I think you can do it online. read this

      The only clarity I myself dont have it is if NPS opened through employer can be operated independently ?

  66. sandeep says:

    Hi Manish, I joined state bank of Indi. In October and in my first salary,an amount was deducted as contributory pension fund, apart from PF deduction.
    I would like to know if my bank will do the work of getting a PRAN for me, or will I have to do it myself?
    Also, whats the difference between tier 1 and tier 2? And if I join pvt sector after a few yrs, what happens to this deducted amount?

    1. Sandeep

      I suggest discussing it on our forum

  67. Devesh says:

    Hi manish.I am devesh from Raipur and working in BSNL(Govt PSU).I have EPF Account and my employer contribute on my account.Can i open NPS Account.Because in EPF we will get very less pension(Max up to Rs3250).

    1. Yes, you can open NPS account

  68. Preeti Mehta says:

    Yes we know about NPS but tell us who is doing this pro.
    because all govt. banks and even post office behave like
    they don’t know about NPS.

    We would like to invest kindly suggest proper person
    for our investment plan. I m from Mumbai.


  69. Ankit Goyal says:

    Dear Sir

    I am a Businessman & i want to know that Can I Open a NPS Account on the basis of Self Employed?
    If yes, the contribution to the NPS is Taxfree other than the Limit of RS 1 Lac allowed under I.Tax Act 80 (C)

    Waiting for your reply.

  70. Roshni says:

    Dear Manish,

    Thank you for the articles and for taking the effort to answer each question. Learning a lot from both.


  71. Prithvi says:

    After reading blogs, I am contributing minimum amount as 500/- per month, because at the end we need to buy annuity policy which will give very less interest rates.

    1. Is there any question there ?

      1. Prithvi says:

        No Manish… Just update… at the end if need to buy annuity policy , NPS not good option is my opinion

  72. Bharat says:


    1. NPS will pay pension from remaining 40% left with them.
    2. Will NPS pay pension to my spouse after my death.
    3. What happen to 40% fund afer my spouse death.

    1. There will be options like do you want pension with return of money (where pension will be less)

  73. Chetan Ambi says:

    Manish, Nice article on NPS.. Comments from readers will add more weight to the article.. Sometimes as much informative as main article itself.. Wonderful blog..

    1. Yea .. there are already so many comments

  74. amandeep chawla says:

    i m a state govt. employee. and the PRAN form is filled by me. my question is that the lines of schemes and fund houses > i can’t understand whether i read the fund managaer houses in the PFRDA website there are 8 to 9 schemes offered by the fund managers. you suggesed me what schems are better for me. my choices is only that i can choose only 3 schemes.

    1. I think it requires more discussion , please open a thread on our forum –

  75. rashmi rastogi says:

    is there any policy of launching franchisee in this nps scheme for increasing the business

  76. Sandip says:

    I’m an employee of a private organisation and earning CTC 4L. I want to start of with pension plan. can’t go for LIC or SBI one as they require the investor age to be 30+. Kindly advice if NPS would be ideal decision for me. I’m totally confused, and what’s the minimum annual investment? which fund manager would be the best one.


    1. Sandip

      I suggest you better accumulate your money in some investment option only . I know you want to create pension at the end, but the best way as of now if to just concentrate on wealth creation . Later you have many ways to create pension !

      1. Sandip says:

        Thanks for your suggestion, could please suggest some good investment options, as i’ve no idea about it, and after reading the many tools available, i get confused off.


        1. Can you state your requirement ?

          1. Sandip says:

            HI Manish

            Currentlu i’m looking for some short/long tern wealth multipliers, i dont have 2 much understanding of MF and scared of it

  77. amit says:

    nice article…

  78. Doris says:

    Dear Sir,
    I am a state government employee since 2011, and as such I have a Tier I account. Since the amount for NPS are cut directly from my pay, and funds are allocated automatically, is there anything I can do to ensure that the amount cut from my pay is being invested properly? Or should I have full faith in the system and simply do nothing? Your advice would be invaluable as I am quite new to NPS. Thank you, Doris.

    1. There should not be much issue .. You can always find out the contribution information using RTI !

  79. devendra singh says:


    NPS (swabhlamban) account open karvaya hai. kya mai NPS se Tier-I ,II account open karva sakra hoo.

  80. Jitendra Kumar says:

    Dear Manish,
    I am 48 years now. To get 20000/month after 60 yrs, how much money should I invest in NPS ? I have PPF account also, could you please suggest me that should I go for NPS or invest in PPF ? I am little bit confused. Pl. Help me.


    1. You can go for NPS , but the issue is the pension interest amount is not clear yet in NPS !

  81. DD says:

    Hi Manish ,
    Can you elaborate the effect of tax deductions for NPC Contributions under 80CCD?

    What are the conditions that must be followed, (like contribution from employer)?

    Can a private emp, make use of it? How?

    Will it be allowed over and above 1 Lakh limit under 80C?

    1. NPS contibutions from employee comes under 80C .. however if an employer is also making contribution on employee behalf that also gets seperate deducations .

      1. DD says:

        like if I receive salary in CTC format,

        can I ask my employer to reduce the in hand portion of CTC and make that contribution to NPS, to save tax under 80CCD(2)?

        1. DD

          Employer has to give the contribution in your EPS anyways as per law. Employer might be ready to invest in NPS on your behalf, but generally its a higher decision if they want to do it for all the employees. Not sure if they would like to do is as exception for 1-2 employees !

          1. DD says:

            ok thanks for reply.

  82. Vishal Jain says:

    Dear Manishji,

    I already have monthly investment in SIP and I also have a PPF account. According to me its not wise to invest in NPS. WHat is your opinion.

    Thanks & Regards.

    1. I personally do not like NPS , but thats because I am more equity biased. For someone who cant think beyond FD and Insurance policy, for him NPS is a good option ..

  83. Roy says:

    Upon resignation from government service, I had applied to CRA-NSDL through the PAO to withdraw my savings from Tier 1 NPS account. However I have not heard anything from them yet.
    Can you tell me what is the procedure to withdraw the money as there is no standard form and a recent MOF circular in the NPS website mentions something critical which I could not understand.

    1. Thats a complicated one , please open a thread on our forum for that

  84. n.palei says:


    i resigned from central govt. job (BRO) ,i want to withdraw my money from pension scheme.give me the procedures

    1. Have you already crossed the retired age ?

  85. S K Banerjee says:

    please furnish the names of the States and Union Territories who not yet have implement the New Pension Scheme

  86. S K Banerjee says:

    Please furnish the names of the states and union territories who have not yet implemented the New Pension Scheme(contributory) effective from April 2004.

    1. I am not aware of that

  87. pankaj says:

    sir muje jyada hard & fast english to nhi aati isliye me hindi me janna chahta hu plz ye btye ki me state gov mp ka employee hu meri posting april 2005 se hi ansdan kat rha he nav ke rate kam ya jyada hote rehte he isse mere payment par kya loss to nhi hoga or ydi me apne paise service time me nikalna chahu to kya kuch paise nikal skta hu

    1. Mujhe ye nahi samajh me aaya ki aap kahan invest kar rahe hai ?

      1. pankaj says:

        sir mera ansdan means gpf katotra sbi pention plan state gov. mp, lic, uti me kat raha he retirment ke baad kya poori payment dene ke baad bhi ye teeno compny muje pention degi

  88. s r rath says:

    Dear Sir,
    i am currently working in a Central PSU where NPS scheme is in place. Here 10% of salary is being contributed (9% from employer side and 1% from employee side) towards the fund by each employee. I just want to know if i resign from service and Join any private job, can i continue the same pension policy by contributing the amount regularly or is there any other option as per rules of nps.

    1. I think the NPS for central govt employee is little different than the standard NPS . THe more clarity will come by discussion on the topic, kindly ask it on our forum –

  89. kapil garg says:

    sir, if i change the service then it is compulsory to change ddo or not it automatically change

  90. archana jha says:

    SIR, Does tier -|| accont under under nps not come under (100,000) exemption under income tax law, like for tax saving investment, we should not wait for roll out of tier-|| account, but to choose another tax saving options.

    1. Yes it comes under tax saving .

  91. MSHarjai says:

    Real good information very useful for a common man

  92. Samir says:

    Any guidelines for EPF withdrawal ?

    My PF lying as it is though company where I worked closed down in 2001 — amount not withdrawn earlier, as company had not paid the Employer’s contribution for the PF — but now I understand the Company has cleared the same about 5 years ago.

    Do not have my identity no. or slip giving details of amounts deposited in my account. Just by giving the Company name can I get all the details — following up only by email – as I have not time to go and visit.

    Shall appreciate your guidance.


  93. pravee says:

    how we know the pension how much amt accrued in our pension a/c
    Is there any term for this

    1. Praveen

      Which pension are you talking about ? NPS or EPF ?

      1. praveen says:

        Its NPS a/c

        where we find NAV of NPS , my age 30 years how we know how much Pension will come after 60 years. what is differenc between NPS and other pvt Companies offering Pensions Funds. Next thing is suppose i want my pension start from 50 years is it possible ?

        1. Praveen

          NPS is a pension scheme by govt for anyone, while EPF is only for salaried employees. NPS has its own rules, you first need to read about it

  94. santosh kumar ujjawal says:

    ssir, i was in state govt.three years but i left the my dept. i have deposit money in ncpf account . it is possible the money is refundable

    1. Santosh

      You mean NPS or EPF ?

  95. pawan says:

    i am regular employ of the haryana state co-operayive and supply and marketing federation ltd. But i have resign from this office on 18/04/2011. Also i have get a pran number from this office. I joins haryana education department on dated 19/04/2011. I want to know that how can i apply for new pran number. Is it possible to apply for new pran number. Or i have to cancel the first one. Or how to convert the old number to our haryana education department. Please suggest me

    1. Pawan

      Thanks for asking the question. We would suggest asking it on our forum, so that more people can have a look at it and give their comments too . Please ask your question on the forum where I personally and others reply very fast . It takes 1 min to create a login and start asking question .. Incase you want me to create a login/pass – let me know

  96. Shyam says:

    Hey Manish,

    I joined in a PSU bank after 01.04.2010, hence NPS is mandatory for us. However i am not in favour of joining NPS Scheme, because of the following reasons.
    1) There is no partial withdrawal to meet contingencies.
    2) Since my age is only 25 years and i don’t want to block 10% of my basic + DA for each month to get it after my retirement i.e. after 35 years from now.
    3) There is no liquidity.
    4) More over i will definitely leave the bank after 1 year since i am in searching for good opportunities. What will happen to my contribution, which i will pay during my tenure in the bank, i think this amount i will receive only after i am attaining 60 years.

    Please clarify whether my reasons are valid.


    1. Shyam

      I dont think you can escape it , you will have to mandatory invest in that, that how govt rule is, may be you can get some solution on our forum if you ask :

      1. Shyam says:


        As per my service rules i am eligible for NPS, however no where it mention that is is mandatory. That’s why i am exploring the possibility of escaping from NPS.


        1. In that case better post your query on our forum, you will get a reply soon :

  97. Samir says:

    Great thread of discussions – every reader’s thought process gets synced.

    Based on Vishal’s comments given about 80ccd(2) – which came into force from 2011 budget, for an investor with basic salary income 2 lac p.a. in previous year, the exemption limit for would be Rs.20000 and for someone with salary 4lac pa it will be Rs40000?

    For a 50 year old, targeting a pension of 7000 p.m from age 60 how much investment should be done monthly/quarterly.

    Is this facility available to people who are business persons?

    Tks for the interesting trains

    1. Samir

      Yes NPS is for everyone , even business people can open that account . I am actually not clear about your doubt . Can you rephrase it ?


      1. Samir says:

        Thanks for-1 the super-prompt response. Will put the queries one at a time:

        For a 50 year old, targeting a pension of 7000 p.m from age 60 how much investment should be done monthly/quarterly

        Shall appreciate suggestions.


        1. Samir

          So you have 10 yrs to accumulate some money which can give around 7k per month . Now that would mean around 3k-4k/month of investment in balanced funds

  98. VISHAL SHUKLA says:

    I see this comment about NPS in website… kindly focus on it… “investments in the New Pension Scheme upto 10% of a persons basic pay is exempt from income-tax under section 80CCD(2).
    This is over and above the Rs. 1,00,000 under 80C and Rs.20,000 under section 80CCF.”…

    1. Yes Vishal

      thats the latest news . It was not like that when this article was written

  99. Vijay Kumar Goswami says:

    Hi Manish,
    My problem is quite different,
    I would like to open NPS a/c, so I visit my both of bank, SBI or Syndicate, but they official not aware of scheme. Even requested, plz let us know also. Despite I am living in Delhi.

    Please help me, where I can open NPS account

    1. Vijay

      These are the authorised POP

      1. Allahabad Bank
      2. Axis Bank Ltd
      3. Bajaj Allianz General Insurance Co Ltd
      4. Central Bank of India
      5. Citibank N.A
      6. Computer Age Management Services Private Limited
      7. ICICI Bank Ltd
      8. IDBI Bank Ltd
      9. IL&FS Securities Services Ltd
      10. Kotak Mahindra Bank Limited
      11. LIC of India
      12. Oriental Bank of Commerce
      13. Reliance Capital Ltd
      14. State Bank of Bikaner & Jaipur
      15. State Bank of Hyderabad
      16. State Bank of India
      17. State Bank of Indore
      18. State Bank of Mysore
      19. State Bank of Patiala
      20. State Bank of Travancore
      21. The South Indian Bank Ltd
      22. Union Bank of India
      23. UTI Asset Management Company Ltd

      May be your branch is not aware of it .

  100. Rajwinder Singh says:

    i am investing in NPS regularly since 2009. i want to knw how much amount i claim for tax reduction if i deposited in NPS . eg if i deposited rs 2000/- on quarterly basis i.e 8000/- in year. So how much I claim for tax benefits RS 8000 or rs 7908 ( as AMC and other charges) as shown in the Satement of holding.

    Kindly Advise

    1. Rajwinder

      The tax deductions are always available on the “amount contributed from your pocket” , so it will be 8,000 .


      1. Rajwinder Singh says:

        thanks …

  101. D.kameswararao says:

    Hi sir I am working in central govt as pay scale 5460-20500(2000 grade pay). i have nps scheme from may,2010 from my salary ie 10% of my salary. Presently i am 33 yrs old. i am asking one doubt that how much lump sum amount can i get after my retirement and how much amount can i get pension per month. please tell me sir, thank u

    1. Its tough to tell this as of now .. It will depend on the govt pension structure at the time of your retirement and how much corpus you have finally !

  102. ajay raj sharma says:

    How must interest can be earned on nps.

    1. Ajay

      Its never fixed .. it depends on market also


  103. Kiran says:

    Hey Bro,
    My DOB is 31-12-1986, and I am planing for a pension scheme for future. As per that without knowing the full information I have deposited Rs. 1000/- to NPS (tier-II) under SBI. So, I just want to know is it the right decision on my part? or what should I do? And moreover I want to know that how to check my balance in that account. Please help me out with some perfect solution for which I shall be grateful to you.

    1. Kiran

      It would be good if you can ask this question on the questions and answers forum :

  104. ravi k says:

    I am investing in NPS from last 2 yrs under IDFC fund Mgmt, the return are not so good, can somebody guide, should I switch my investment to any other fund mgmt, if so which fund house.


    1. Ravi

      Yes you should shift it to some other fund house . there is not much tracking on the performance, so it would be tough to suggest anything on that . better ask on our forum :

  105. Ravi Arya says:

    I was working in a Central Govt. Organization earlier for a period of 1 year, where I had NPS Tier I account, But now I have left that organization….
    I saw a link in the onlinesbi with which you can contribute to ur NPS account, but when I send money to my NPS account, it came back with the message “NPS REJ TXN – Sub does not belong to Unorganiz “. Can anyone tell me what can be done for using the ONLINESBI for crediting to NPS Or is there any other option to credit online to NPS Account…

    1. Ravi

      You must get your answer from our forum :


  106. Saurav Sinha says:

    Hi Manish….
    Q1) How can we track the performance of fund managers of NPS? Is there any particular site or are any of the involved Fund Houses declare the same on there website?

    Q2) Out of ECG, I am going to put 50% in E, but not very clear about the % allocation in C & G schemes, can U help, given the tenure is around 30yrs for my case?

  107. Rahul Raj says:

    Hi Mansh,

    1st of all, thnx for these valuable information.

    I’m a Central Govt Employee and joined in March 2010
    How much may I receive as monthly pension after retirement under NPS? And how can I ensure that the pension will be sufficient enough to led a good retired life?

    1. Rahul

      your pension amount cant be predicted like that ,. it will depend on wich post you wre , how much did you earn and how much you have in your pension account

  108. ajay says:

    check this …
    from :– Sat, Oct 1, 2011 at 11:43 AM
    To: Ajay Kumar Tiwari

    Dear Subscriber,

    Greetings from CAMS!

    With reference to your mail, please find attached the offer document for Tier-II.

    You can transfer the amount from Tier-II to Tier-I, but as of now it is not into effect. As ans when the same comes into effect we shall intimate you.

    If you have an existing NPS account under central govt. you can open the Tier-II account with us. The initial contribution amount should be for Rs.1000/-.

    For further assistance please do not hesitate to get in touch with us.

    Assuring you of our best services at all times.


    Manjula K

    Unit: PFRDA(National Pension System)
    Computer Age Management Services Pvt. Ltd.
    Rayala Towers – II, Vth Floor,
    158, Anna Salai,
    Chennai – 600 002

    Contact Number : 044 – 30212 808 / 636 / 900

  109. Binu sasi says:


    I have opened a NPS through Bajaj capital. I got the PRAN card. I got the information that ICICI bank has an online payment for NPS. I opened an ICICI bank account. I tried to make payment and it bounced back. In the site they mention that online payment option is available only for those NPS accounts opened through ICICI. Now is there any other online payment options. Can i give an ECS mandate to any other POP , other than Bajaj capital. It was a stupid decision to open the account through Bajaj capital. Kindly advice.

  110. vishal says:

    sorry ! 10% of (BP+GP+DA )

  111. vishal says:

    amount of Tier-II cannot be transferred to tier-I, as in tier-I, govt salaried person can invest only 10 % of (Basic + GP ) and not lower or higher than that.

  112. Ajay says:

    Manish Sir,
    thanks for this good site

  113. Saurav Sinha says:

    Hi Manish & fellow JI followers…

    Plz help me out with few queries:

    1) How to track the performance of each of the PFM like ICICI, SBI, Kotak, UTI, LIC etc to compare the ROI?

    2) Fund managers’ names & their performance in managing similiar kind of funds?

    1. Saurav

      Your query is not clear to me !


  114. AKP says:

    Hi guys, thanks for your comments. I am reconsidering my investment just before going to post my package from here today. Can you give me some advice for long term corpus generation.
    I’m at 30, Currently having about 35,000 INR/month money to invest and willing to take risk and also want to use power of compounding. Although looking for permanent jobs in India.
    Can you suggest some avenue!!!

  115. AKP says:

    Check for the recent update with New Pension Scheme in Facebook!!!

    1. Great to see that πŸ™‚

  116. Dr. AKP says:

    Hi Manish,
    Is it possible to convert Tier II to Tier I in NPS if someone open a Tier II account and then secure a cental Govt. job later on. I mean the earlier contributions in Tier II can be forwarded to mandatory Tier I account for Govt. employee?

    1. Dr. AKP

      I truely have no idea on this . You can better ask on forum which will be answered by other members , probably some one from there will know about this :


      1. AKP says:

        Manish, Its best to open Tier I account even if you don’t have any Govt job and offcourse you can continue with your contribution if you secure any Govt. job later in your career.
        I just spent nights in your blog. Its very thoughtful write up.
        I recommend lot of my friends here in USA about this site.
        I am applying for NPS tier I from USA after learning it from your blog.
        Its best long term investment which make use of power of compounding!!!
        I am also trying to aware people and created a facebook profile. I invite you to share your few thoughts there for NRI.

          1. SG says:

            AKG, what benefit does Tier 1 account give you?

            For your first question > you can withdraw all your money from Tier 2 and invest them in tier 1.

            However, note that upon retirement, 40% of your money in tier 1 has to be used to buy annuity.

            This is not the case in Tier 2. You can withdraw entire money when needed, giving you more liquidity.
            I dont see any advantage to have more money in tier 1 account. I just make sure that i maintain the minimum criteria in tier 1 and all additional investments in tier 2

  117. SSM says:

    Dear Shri Manish
    Many Many thanks for the reply. Thank you very much for the advice. Kindly tell me which equity fund is better to invest on monthly basis. Similarly pl advise some mediclaim policy. Is State Bank PPF is Ok for him now?

    Once again extremely thankful for your kind reply

    1. SSM

      He can invest in some balanced funds like HDFC Prudence or Reliance regular balanced funds (these are pure balanced funds) .

      If he wants to take more risk , then he can take DSPBR top 100 or HDFC Prudence .

      Mediclaim policy is not easy to recommend like this on comment ,you need to see your self which one looks good to your situation

      PPF is a central thing, its not “SBI PFF” . SBI can only be the bank to open PPF account . but PPF is maintaned in the same way if you open it from SBI , Post office or Maharasta bank , whatever !


  118. SSM says:

    Dear Sir
    My son got a private job recently. He doesnt have a PF scheme in his organisation though it is having more than 20 employees. Hence I wish to put him in some pension plan. Somebody suggested ‘Life gain Plus’ scheme in Max New york life. Will this be better or NPS is better? kindly reply

    1. SSM

      I wont recommened any of them at the moment, just ask him to invest in a equity funds monthly for long term, he can buy pension plans later


  119. usr says:

    Nice comment,i have found it very useful

  120. SG says:

    Not sure if anybody is aware of this.

    You can only make contributions from the POP you open your account with.

    I made a mistake of opening my account with CAMS. They have only 1 office in Hyderabad and quite far from my home. I have tried 3 other POPs to make my contributions, but they say the system does not allow.

    To top it all there is no online payment option.

    It gets really difficult to maintain such an account if i can make payment only at 1 center in the entire city.

    1. SG

      Thats a good info , Can you change the POP now ?


      1. SG says:

        As per the person, i enquired with, it is not possible to change your pop service provider.

        So guys, please check the list of pop in the nsdl website and open your account with the pop having maximum presence. This would help you later on.

        1. Raj says:

          You can open with ICICI direct, it has online facility too.

  121. Hargovind says:


    It is really heartening to see the main opposition party the BJP to help government in the PFRDA Bill when it was put up in parliament recently.

    I think the Svalamban scheme announced by the government is also a unique and best way to take NPS to the masses.

    As per the Government guidelines for Swavalamban, any citizen who is not part of any statutory pension scheme of the Government and contributes between Rs. 1000 and Rs. 12000/- per annum, could join the Swavalamban Scheme.

    One can find more details on where there is a analysis on this scheme.

    Best Regards


    1. Hargovind

      Thanks for the useful information πŸ™‚

  122. VJ says:

    Is the contribution to NPS for FY2010-11 or FY2011-12, considered under sec. 80C of Income Tax ? Is this formally notified by Income Tax in current tax law ?

  123. Natraj says:

    Hi Manish
    I have a query on employer contribution to NPS. How can a employer contribute to employees NPS account ( I am working for a small company with less than 7 employees, so do not have EPF contributions from my employer. I want to ask my employer to contribute to my NPS, but I will have to tell him how to do it exactly. Can you please help – this will allow me to save some tax)

    1. Natraj

      Actually Its applicable for govt employees . In govt employee always had NPS , only recently its opened for normal public


  124. kd says:

    what if one resigns for a private company? has he also have to annyitize 80 percent?

    1. kd

      your question is not clear


      1. Saurav Sinha says:

        Hi Manish .. Hope Ur doing fine… Im going 4 NPS by this week… 1 small query … it asks for % allocation in Equity/Govt bonds/Corporate bonds… while I’ll be opting 4 50% in Equity, what about the rest 50%? I mean, out of Govt & Corp Bonds, which’ll be better in the long run so as to keep max % allocation of funds?


        1. Saurav

          I dont have much idea on that , but you can keep rest in govt bonds , it would be safe


  125. sandeep says:

    waht about a person who is central govt. employee join after 1.1.2004 and have PRAN card . in between it he was selected a another good job of state/centre of lower pay -scale from the existinf one. for which dept he presnently serving does not provide No objection certificate for that post what he will do if he want to join new job whether he Regine and join new one job then what about his pran no. what to do.

  126. Suresh says:


    Iam 34 years now and Iam already having pension plan with ICICI prudential and Iam maintaining for the past 6 years. Is it good option to open NPS or better continue with ICICI pension plan. Iam trying to compare the safety of both the funds in long term.

    Also is it possible to transfer all the money from ICICI pension to NPS? If I do that , will it be profitable or will be at a loss?


    1. Suresh

      NPS comes from govt , but even there your money is invested in equities which is not guaranteed . so i would suggest continue with your pension plan at ICICI at the moment .

      You cant transfer your pension plan to NPS , however you can always sell it off and reinvest in NPS


  127. Raj Kapoor says:

    I am currently employed in a psu bank. Will i get NPS money (my contribution+govt. contribution) if i resign from my current job
    and move to a private organisation?

    1. Raj

      I am not sure on this , I would suggest asking it on our forum , you should get an answer soon :

  128. Gaurav Singh yadav says:

    I want to know that amount received in this NPS scheme is still taxable or not??
    And how it is better from PPF??

    1. Gaurav

      As per the current tax rules an DTC , it will be tax free . You cant compare it with PPF as NPS also has equity component , so you are actually comparing debt and equity which is a totally different thing


  129. Saurav Sinha says:

    Is it? Great then… Now Im serious about it… Few more clarifications are needed Manish assuming I opt for 50% Equity n rest in debts … 1) Can we know in which sector our Fund Manager is investing as in large cap, mid cap industries etc.. 2) Can we change our Fund Manager, if yes then whats d charges n max limit of changing them… 3) Is the entire contribution upto 1lac is deducted from Taxable amount… 4) Will Govt contribute any amount towards private sector NPS account holders… 5) What are the plus n minus points of Tier-II account apart from withdrawal facility?

    1. Saurav

      I would suggest you initiate a thread on our Forum which will have other members and they will answer about it in detail :

      You can also look at other discussions already done on NPS :


      1. Saurav Sinha says:

        I wud luv to but the thing is nobody responds promtly in forum… I initiated a query on BSLI Dream Endowment plan in forum but nobody responded.

  130. Saurav Sinha says:

    Hi All… A small confusion… I went through PFRDA site which clearly says that NPS is not for anyone who has an EPF account…. But here Im reading that anyone can open NPS account. Whos correct? PFRDA site is not having updated details?

    1. Saurav

      Can you give the link , because I am sure its not the case , it might mean that some one with EPF does not need NPS as he already has a medium to invest money for his retirement .


      1. Saurav Sinha says:

        Thanks 4 responding promptly Manish… N sorry 4 not doing the same… The link PFRDA FAQ given by U clearly mentions those who are not eligible for NPS! U can visit the site and check FAQ link on top right corner, wherein U’ll see “Who are not covered under NPS” and the very 1st point says it…

        1. Saurav

          ahh , you have a bit confusion here .. You can also see a link called “who is covered under NPS :” which means that who all already have NPS by default . Thats the reason there is another link which is “Who is not covered” , which means that anyone who is alreayd getting EPF is not by default under NPS , people who are in govt jobs after 2004 already are under NPS schemes . so in the same way if there is anyone who is under EPFO , are not by-default covered by NPS . However it does not restrict them to get NPS from outside if they wish to πŸ™‚ .


  131. pravin bhatnagar says:

    Hi Manish,

    A good news to yotur readers that ICICI Direct has now put an online option for all NPS process

  132. Kirteekumar Manohar Gore says:

    I Want open NPS pension scheme. Where I open this account. In Bank? or any other. If bank, please send me the bank lists.

    1. Kirteekumar

      If you read the articles , there is something called “POP” where you can buy the NPS


  133. RIJU GANGULY says:

    I have the following queries:
    1) Is NPS listed among the approved Pension schemes (under the Direct Tax Code) wherein investment upto Rupees one lakh every year would be exempt from taxation?
    2) If the answer is “yes”, then would you advise me to stop contributing into ULIP-based Life Insurance policies (I am not sure whether they would be treated as “pure” policies that allow exemption upto Rupees Fifty Thousand every year) from April 2012, and rather invest more in NPS (as of now I am investing the nominal Rupees 6000/- only)?

    1. Riju

      1) Yes
      2) I would advise not to continue even ULIP’s . Are you able to utilize the power of ULIP’s ? You should rather buy pure term cover and use MF for investing .


      1. RIJU GANGULY says:

        Thanks a lot for the specific suggestion. As of now, I am accessing my NPS account through ICICI Bank as the POP-SP, which I had used for opening the NPS A/C. Can I shift the POP-SP to CAMS, so that I may avail of the ECS facility?

        1. Riju

          You will have to enquire about it with CAMS , I am not sure .


        2. Manjula says:

          Hi Riju,

          You can very well avail the ECS facility with CAMS, please log on to, download the PRAN ECS mandate, enclose a cancelled copy of the cheque and an initial contribution of Rs.500/- minimum (cash / cheque or DD) in favour of CAMS Collection Account – NPS Trust. For more queries please write to


          1. Manjula

            Thanks for the comment from your side. I appreciate your help on this forum


            1. Manjula says:

              Thanks, i just saw this site and gone thru all your comments and the questions raised. Its just marvellous. Your clarifications were so clear.


  134. E Pradeep says:

    Manish, I opened an account through South Indian Bank in my hometown in Kerala and since then I have struggled to find avenues to make my contributions to the account..There is no online option which is a major concern…And even banks and FIs seem to be clueless..

    Remittances to the NPS Account is available only in select branches of the PoPs which means that you need to go hunting for branches where contributions are accepted..3 of the PoP SPs that I called up to inquire whether they take contributions to NPS had no clear about it..The nearest PoP-SP for me was SBH, Gokuldham but when i visited the branch, they had no idea of such a product. Even when I showed them my PRAN Card, they were clueless about the entire thing and I had to go back without making the remittance…

    The PFRDA must first educate the PoPs first!!!!

    1. NPS is something which is a half baked stuff right now , So yes there would be many things like this , For now you can limit your investments in NPS


    2. Vikas says:

      Yes, the level of awareness at POPs is a problem. I went to the relevant POPs in Delhi and still had troubles with employees who were not confident of what they were doing. I finally settled for ICICI Bank for they have an online payment option.

      Another thing that you will soon discover are the charges for making deposits. Do not, under any circumstances, exceed the 4 minimum per year condition. The ‘lowest cost scheme’ is not all that low cost.

      1. Oh thats a nice thing to know πŸ™‚ . thanks for the info


      2. Aditya says:

        Hello Vikas,

        Could you please ellobrate on your statement about exceeding contributions more than 4 times a year & subsequent charges ? What charges would be applicable then ?

        I am in the process of opening an NPS for myself.


        1. Aditya

          There are manadtory 4 payments atleast under NPS right now . If you do more than that there might be extra payment charges which are unclear at this moment, I am not sure why you need NPS ? Why ? Read this :


        2. VikasK says:

          Having technical problems – please excuse if reply appears twice.

          Hi Aditya,

          There are no extra charges for making more than 4 installments.

          The charges for the account as per the PFRDA website are as follows – ( —- go to page 5 of this pdf):

          POP Charges / installment – Rs 10
          CRA Charges / installment – Rs 20
          Total Charges / installment – Rs 30
          At a minimum of 4 installments per year you have to pay Rs 30 X 4 = Rs 120

          Annual account maintenance charges (CRA) – Rs 350

          Total = Rs 470 + service tax

          Now if you are making large investments then it is fine. The charges are still insignificant and small. However, if you are thinking in terms… say… Rs 24000 p.a. then these charges come to more than 2% (at lesser amounts even more damaging).

          Now consider a scenario of an SIP in this scheme. A monthly SIP will cost you – Rs 30X12 = Rs 360 and Rs 350 (annual charges) = Rs 710 + service tax.

          Do the math according to your investment plans.

          I am yet to include the .0009% fund management charges and custodial charges of .0075% or .05% – whatever these charges mean.

          The less installments you pay the better it is. It is not a scheme for the small investor or an unorganized sector self employed person.

          The worlds cheapest scheme is pretty expensive. To add to it the fund managers are lobbying for increasing the .0009% charges as well as the corpus has not grown as per expectation and they are not even covering their expenses (they claim).

          1. Aditya says:

            Hello Vikas & Manish,

            @ Vikas : Thank you for the detailed explanation. Clears-up couple of nagging doubts I had from long. It would be interesting to note how much the Govt relents to alter the charges in the near future due to persistance of the Fund managers.

            @ Manish : The reason for my opening NPS account is just as a back-up for Pension planning. Currently I am filing my taxes as an NRI (as I work on oil rigs abroad), hence I am not allowed to invest in debt schemes like PPF or Savings certificates. I am contributing regularly to equity Mutual funds (although I must admit not on a monthly basis). Since your blog has pointed out that returns from Insurance/Endowment policies are way below either PPF or Equity mutual funds , the next best choice I saw was NPS , which has give returns in the region of 10% last 2 years or so. I did read Mr. Subra’s blog about NPS and the short coming.In one of his earlier blogs , he has advised against heavily investing in debt schemes (e.g PPF) for investors planning pension & promoted investing in Index funds. Its more like choosing the lesser of two evils, since Pension plans offered by private copanies charge in the excess of 2% AMC not mentioning other hidden charges ! Although I do believe IRDA has now made mandatory returns in the region of 4.5% for these schemes, but am sure they will find loopholes or way around by charging more.
            As far as I can see, its a sad scenario where pension is concerned for un-organized sector like ours where employer cares a hoot about the employees.
            Just read yesterday in one of the leading dailies, that there is a short-fall of a few thousand crores in the Employees Provident Fund scheme due to mis-management & corruption !

            Warm regards,

            1. Aditya

              Hey I remember we met in Mumbai meet right ? But you are saying you work out ?

              You can invest in PPF incase you had the account already open , but now you cant open it with NRI status . NPS might be a ok choice for you , just think hard whats best for you .


            2. Aditya says:

              Hello Manish,

              You have excellent recollection, its been what 2 months since we met last ? πŸ™‚

              As I said , NPS would be just as a back up till the time there is more clarity on Pension funds in India. Unfortunately I didnt open PPF previously. I have recently ordered Mr. Subramaniam’s book wr.t. penson planning. Awaiting its delivery. Maybe I would get more clarity about pension planning in India.

              Hope everything is well your end. How did the Banglore session of Jago Investor go ?

              Warm regards,

            3. πŸ™‚
              We are yet to do the bangalore meet , waiting on more time πŸ™‚


          2. raj says:

            Payment of NPS contribution in a single premium :
            For the convenience of the subscribers, and help
            popularise the NPS, it has been decided that NPS subscribers
            will, henceforth, have the option to pay their yearly NPS
            subscriptions in a single installment (as against the stipulated
            minimum 4 installments in a year) on payment of fee applicable
            to one installment.

            Source ::

  135. chvvrkch says:


    i have a query regarding NPS Tier II account……will the investments in Tier II account, qualifies for the 80C deduction…..?
    As they dont have lock in period in Tier II…….


    1. No

      It does not enjoy tax benefits , its a add on account which is voluntary savings facility for you. Your contributions and savings in this account will not enjoy any tax advantages. But you will be free to withdraw your savings from this account whenever you wish.


      1. chvvrkch says:

        Thanks for your reply, Manish……..

        Then if i invest in Tier II account, then is it taxable at the time of withdrawal or not? If taxable, on what basis tax has to be paid ?

        1. I dont think there is enough clarity on that , atleast I dont have


  136. Balbeer says:

    Dear Sir,
    I am a Central Govt Employee appointed in 2007 but dont have much knowledge about the NPS. I just want to know whether i will get a regular monthly pension or one time fixed amount after the retirement in NPS.
    I have opted to invest only 10% (minimum limit) from my salary. should I have to increase it?


    1. Balbeer

      You will get a monthly pension . You can increase it if you dont want to take another instruments .


  137. prasad says:


    is there any update in this regard ?
    >>>the amount received at the end from NPS would be taxable..
    is it still taxable ?

    1. Prasad

      No , it would be tax free now as per revised tax code .


  138. Prasad says:

    Do you have anyupdates for Viral questions at the start of the blog?
    What happens to the corpus after the death of the spouse?


  139. Karthik says:


    Can you tell me about partial withdrawal in this scheme? Is it possible only at 60? It is 35 years away for me!!

    Also I read it will come under EEE from 2011.


    1. Karthik

      yes , its under EEE and withdrawal only at 60 .


      1. Charu chhabra says:

        I have resigned from my state govt job and joined central govt job. Tell me How to cancel my previous PRAN CARD because I want to cancel my PRAN CARD n want my PRAN No from central Govt. Because in Central Govt I have not showed them that I was employed in Govt Department earlier.
        Please also tell me how much time the process will take to cancel the PRAN CARD.
        Please reply its urgent.

        1. I am not sure if you can do that .

          Ask your questions at forum to get more info from other readers :

        2. vijay says:

          charu i have the same problem , i m selected in central gvt and im working in state govt. can u tell me please
          did u got the new pran or u have to use the same pran
          please its urgent

          1. mahendra says:

            mera bhi same problem h

        3. jackey says:


          You can apply for new PRAN.

  140. A.K. Wadhera says:

    Respected sir, I retired from pN Bank as an officer. I remained under suspension w.e.f 13/6/95 and after conducting departmental till retirement in Nov.1999.After conclusion of department enquiry, major punishment of compulsory retirement was given. Though I had opted for pension in 1996,which was duly acknowledged by branch & zonal office, but on retirement. PF (my & bank’s conribution) alongwith gratuity was paid. I filed my protests & asked for pensionary benefits, to which bank made no reply. Hence , writ petion was filed in 2001, which is still pending. As per pension regulation rule 22. ressignation, dismissal, removal or termination will forfiet entire past service.which is not my case.As per regulation 21, my suspension period may not be counted for qualifying service and period from my joining in 1971 to date of suspension may only be counted as qualifying service. Now in terms of regulation 33, an employee compulsorily retd. as a penalty,by the authority higher than authority competent to impose such penalty, may be granted pensionnot less than 2/3 and not more than full pension…In case lessor pension is allowed, board of directors are to be consulted before passing such lessor pension. Now my querry is in case I opt for pension under 9th. bipartite settlement, whether a fresh decision will be taken before making me eligible for full pension, or in the absence of any such order having been passed earlier at the time of passing order of compulsory retirement, no such fresh order can now be passed, and I shall be eligible for full pension. Kindly advise me in the matter.

    1. A.K Wadhera

      This looks more of legal issue than pure personal finance issue , you should hire a lawyer πŸ™‚


  141. raj sinha says:

    hey manish

    can we have updated details on NPS as there is govt contribution of Rs 3000 etc. and your feedback/review/suggestion currently.

    1. Raj

      Yep , in the last budget they said that they will contribute 1k to each account for next 3 yrs.


  142. jo says:

    HI ALL
    if i plan to deposite 4,50000 as n lumpsum amount as an pension scheme plan , after 3 years how much amount will be given per month.

    1. Jo

      It depends from pension to pension scheme, you can expect around 5% amount .


  143. sudhanshu says:

    presentely i am in Agra and basically i am belong to Gorakhpur. i am interested to open a A/c in Agra will you give the name of POP /bank in which i do same .

    1. Sudhanshu

      The banks are same which I have listed, you can choose any .


  144. prashanth eyyala says:

    Manish, Have been doing some sort of research on this subject. In my view taking the tier II probably scores over the MF\ULIPs over the charges. It is approx 0.0009% + allied charge. On a average it will come to approx 0.0008%. Additionally the investments are made in Nifty Stocks pretty much giving balanced returns. I also got to know from one of my well informed friends that the charges are going to come down since the subscriber base will cross 10 L soon. 10 Lakhs includes all the members ( govt as well). Am actually setting up this account today.

    1. Prashanth

      Actually there are two things which will matter in long term .

      a) Charges : This is really a big thing, as its low in NPS , it will definately work in your favor .
      b) How you use it : The most important aspect of market linked product is how you can handle the switching and do you do it at right time .

      Other than this there are some issues like Taxability point which is not clear .


    2. Vikas says:


      Not sure what the charges are for TierII. I lost interest and steam after opening a Tier I account.

      Two problems are there:
      Tier II account can only be opened after you have opened a Tier I account.
      In a Tier I account if you stick to the basics – 4 transactions worth Rs 6000 in all in a year – the charges for making the transactions itself work out to Rs 120 or 2% (Rs 20 at POP and Rs 10 at CRA X 4). I am not yet considering the fixed charges at all.

      On Rs 6000 if you get a 10% return you will have Rs 600 in hand out of which the charges are

      Rs 120 + Rs 350 = Rs 470 (at reduced rates [Rs 20 + Rs 6] X 4 + Rs 270 =Rs 374)

      would be taken away as charges. Service charges are extra. Might as well put it in a long term FD and pay TDS.

      The absolute charges make it a very silly scheme at lower levels of participation. If a larger sum is put in Tier I then a lot of people will find that they are not left with much for Tier II.

      Also, study the charges of Tier II wrt to the amount you are likely to invest. I am sure the difference between T I and T II can’t be too much in terms of charges.

  145. Raj says:

    The major set back of this scheme is it does not have online premium paying facility and you have to make minimum four contributions per year. That means every quarter you need to go to bank or drop cheque. Currently ECS facility is provided by only Axis bank and cams.

    Unlike you make Rs 30000 contribution, charges seem quite high.


    1. Raj

      I didnt knew this . Not having online facility is not something which is desirable . I am sure it will happen in future .


      1. Vikas says:

        POP can provide you an online payment facility. ICICI Bank does that for its account holders.

        Overall the charges in the scheme are very high. At an annual investment of Rs 24000 the charges work out to 2%. A couple of questions on this site were asking for Rs 12000 annual contribution. The charges go up to 4%. This is criminal.

        Also, one should NOT do a monthly investment in it. Do a quarterly investment. This is because every investment transaction will attract a charge of Rs 30 (Rs 20 at POP and Rs 10 at CRA).

        Eventual tax treatment is also not a good indicator for investment if your horizon is closer to two decades. This is because tax laws are not stable and the DTC would have had many more releases by then.

        1. Dominic says:

          I have seen couple of uses mentioning about ICICI bank providing NPS deposit features. I was searching in the bank’s web site and I dont see one. Could someone point me to the right direction.

          Also iwas told that Rs. 1000 will be added as an incentive if we start and cross 12000 in this financial year. When do I see this 1000 credit.


          1. Dominic

            I guess this will help a bit :

            Better check with a near by ICICI branch .


          2. Vikas says:

            Hi Dominic,

            For online transfer to your NPS account (if that was the query) you can do it through

            Go to ‘Bill Pay’ section -> click on ‘Register a New Biller’ -> Choose your city from the drop down and in category choose ‘Pension’ -> In Pension the only option is NPS.

            While registering keep your Pension Acct details handy. It will ask for your Pension Account Number and Date of Birth as it appears on the card.

            Once you have registered you can make payments like you would do for any other biller.

            – Vikas

            1. Dominic says:


              This is what I was looking for. Thanks a lot.

              Best Regards, Dominic

  146. Aditya Pednekar says:

    Good day Manish,
    Superb information throughout all your articles. Kudos! It has immensely helped a novice like me to understand personal finance better.

    I have a query & will be grateful if you answer it (Blame it all on insight provided by your literature πŸ™‚ )

    My father recently (Age 55) has recently opted for Bajaj Allianz Future Secure II– Pension plan (pure pension plan – option A). Payment chosen is 4Lac per year for 3 year term. I was skeptical about it as I would have liked if he had invested in Senior citizen plan’s offered by banks or a FD (given his age). Although I would not like to judge him by his investment rationale, is it justified at his age to opt for a pension scheme linked to the market? He has been a very conservative investor throughout his life investing in EPF’s,PPF , FD’s including some investment in direct equity. His retirement age is around 62 and the amount specified annually is well within his means of earning.

    I would be awaiting your views on this investment.

    Many thanks for the good work you have done so far.

    Warm Regards,
    Aditya S Pednekar

    1. Aditya

      I would say its not a wise decision for him to go for this pension plan . The point is he should have gone for Senior citizen scheme of Post office which provides 9% stable guaranteed return for next 5 yrs , which is the best stable return any person in his age group can get .The problem with pension schemes can be the charges , complexity . Even though he as a choice of putting all money in debt portfolio of pension scheme, its not worh the effort at this stage , after all you retire for leaving all those worries and tensions in life , and not back to look each day back in your retirement kitty and its performance πŸ™‚


  147. KP Misra says:

    Dear Sir,
    If I deposit 1000 pm and now my age is 47. After 60 years what pension I will get pm? I do not want any lumsum amount want some monitery help pm for rest of the life.

    KP Misra

    1. KP

      You have 13 yrs in hand , if you invest 1000 per month , you can generate around 3.75 lacs at the end of 13 yrs , assuming 12% return . Pension depends on the returns you get out of your corpus , at the moment , if you have 10 lacs you can expect 7.5k per month for rest of the life . Which means with 3.75 lacs after 13 yrs you should expect around 3-4k per month as monthly income , thats all .

      Looks like you have lost the precious time of accumulation phase in your life , now you need to invest atleast 20-30k per month to generate a decent corpus size for retirement .


  148. Krishna says:

    Dear Sir,
    At the time of withdrawal, the amount is totally tax free ,then more people attract to this plan. For private employees this is not best, because their hardly earned money will get after retirement how much they deposited . For Govt. employees they will get double. This is not transperant. So that for private employees govt. will give some percentage of govt. contribution then more people attract to the plan.

    1. maturity at the end can be can get taxable with new tax code coming in .


  149. angela says:

    Hi Manish,

    I working in a private company and my age is 30. If I opt for NPS and deposit 1000 per month for next 30 years and choose moderate yield moderate risk option, Can you please calculate for me, what amount I will get at the age of 60?


    1. Angela

      It is mentioned at , I would encourage you to learn thing so that you can calculate things on your own , however here let me do that for you , so the only thing which you need to assume here is rate of interest which you would get , considering its invested in balanced funds, you can expect a return of 10% .

      So tenure(t) = 30 yrs or 360 months
      Rate(r) = 10% or 10/12 per month = .0083333 = 0.10/12
      Amount(a) = 1000 per month

      Final Corpus = a * (1+r) * [(1+r)**t – 1]/r
      = 2279305

      How ever , i would suggest better put it in pure equity which might look more risky , but considering its very long term , you can put it in pure equity , then you can expect 12% atleast , or why not put in pure diversified equity funds . you can then expect 13-14% .. which mean your money will grow to

      3529913 (@12%)
      5557055 (@14%)

      Try to learn on your own all these stuff’s please , its for you


  150. Hitesh says:

    Thanks for the info manish…
    I have a doubt though..if we are still awaiting the jury on the NPS, till then how should we plan for retirement…

  151. rahul says:

    what if i resign the job befor retirement?how can i withdraw?
    what if i posses two prans?how one can get de activated?

    1. rahul says:


    2. Rahul

      I didnt get you , how can someone resign after retirement ?


      1. SATISH says:

        what will happen to my nps money if i resign from my govt job before retirement

        1. Satish

          NPS has nothing to do with that . NPS is another pension scheme. It has nothign to do with if you are a govt employee or not .


  152. Sanghit Mallick says:

    NPS is also a good option. But it is in its childhood. So
    as a planner I can say; Get your financial target located,
    then have asset allocated, invest in NPS ( –%) and in
    aggressive pension schemes (—%) of your yearly pension outgo.
    Wait & watch for 3 years, then review. Thanks.

    1. Sanghit

      Thanks for your views πŸ™‚


    2. Aditya Pednekar says:

      Could you please shed some light as to how there aggressive pension schemes operate ?

  153. Sathya says:

    Answers to Questions:
    1. I m not personally interested in NPS. Its like a government issuing ULIP’s or ULPP’s. But will there be any transparency in what the fund managers are investing in?
    2. Government will need to give it EEE status. It would be an attractive option only if government makes it less complicated.

    What do you guys say?

    1. Sathya

      Definataly there has to be transperancy , They have to declare the investments just like regular ULIP’s . Untill it becomes EEE , it would not be as much attractive as other options . But once New tax code comes in , it would be an attractive options then as everything will be taxable at the end .


  154. HARISH THADANI says:

    if we open the account now.if there is change in tax rule i.e EEE in future.Wheter it will apply for previous investment in NPS ?

    1. Harish

      Yes it should


  155. om says:

    hi all,
    can you please tell me that a govt. employee get appointed before 1st jan.2004 and having GPF a/c is eligible to open this account for another pension?

    1. Anyone other than me has some info on this ? I am not sure on this one .


      1. Amit says:

        No you cannot officially………private NPS account can be opened though(call CRA NSDL…..they will explain it to you)

  156. S Singh says:

    Not a bad idea for long term investement. Gut feeling is at some point of time govt will make final income tax free. May be one can start with risky option and later on switch over to safer ones, depends on age.

    1. S Singh

      I dont think govt will make income tax free ever .. it can happen but chances are extremelly low in our country πŸ™‚


  157. HARISH THADANI says:

    if we open the account now.if there is change in tax rule i.e EEE .It will aply for that or not/

  158. rajenderballa says:

    hi Manish, Great information…Can we open this scheme online thru Demat account?

    1. Rajender

      For now you can not open through demat

  159. Manish Chauhan says:


    thanks for visiting , stay tuned to read more articles πŸ™‚


  160. tanjot says:

    Great Information!! And Possibly it should reach to every employed Indian, at least in both urban as well rural areas…Great job..Thank u

  161. Manish Chauhan says:


    Thanks to Praveen for adding more useful information . Great !


    1. ravi says:

      Dear All,
      Kindly tell how to invest in NPS. I am new to investment kitty for my retirment.I am 28 yrs old.


      1. ravi

        Go to any point of presence and you will get information their about the procedure for investing in NPS


        1. a rup says:


          Where I’ll go, at bank or P.O. or LIC, where I will open this NPS?

          Let me know please.


          1. You have to go to the point of contacts , they are the banks mentioned in this article .


  162. apk says:

    Some more info I wud like to add:
    1. The account can be operated from any place in India. PRAN is unique permanent number assigned to a person and can be operated from any place.

    2. In May every year, one can switch funds, change fund manager. PFRDA is planning to increase the number of switches.

    The information I have shared is based on article that appeared in Outlook Money magazine.

  163. apk says:


    The difference between Tier-1 and Tier-2 is that Tier-2 allows partial withdrawal. But both Tier-1 and Tier-2 allow complete premature withdrawals.

    Correct me if I am wrong.

    1. sir I joined in BSF 2004 jan every month deducted 10% in my salary but now i resign my service but i joined another company my NPS amount will be continue or not in case continue what is the procedure, withdrawal how much amount i have getting my service completed 10 years 5 months 18 days. pls give me details information.

      1. At this moment, I am not sure on what is to be done in this case ! , Please share this on our forum

  164. apk says:

    Some more additions:

    1. Entry load -> Rs 50 deducted from fund value as account opening charge. Rs 40 deducted as initial registration charge.

    2. Recurring Load:
    You can opt for either fixed charges or variable charges if my understanding is correct.
    Fixed charges: Rs 350 and Rs 10 deducted as CRA charges. Rs 20 per PoP transaction.
    Variable charges: Custodian charge of 0.0075 – 0.05% p.a. Fund management charge of 0.0009% p.a.

    Premature Withdrawals:
    No partial withdrawal allowed.
    Complete premature withdrawal mandates annuitization of 80% of corpus.

    Maturity benefits:
    Upto 60% is given as lumpsum, which is taxable at applicable rate (this rule hopefully will change). Rest is given as annuity.

  165. Manish Chauhan says:


    Thanks for the comments and valuable additions . I was actually not aware of these points. I am glad you mentioned these points .

    The reason govt employees may get extra from govt is that govt is employer to them and not to private people. Private company employees get EPF contribution from there employers . So this time its govt employees chance πŸ™‚

    overall still one should wait for more clarity in NPS .


  166. Sachin says:

    Also one more point, For Govt employees, Govt will also pay the same amount along with their employees to the NPS corpus.

    But this is not the case for Private employees. Private companies need not pay anything. And I am sure that no private company will follow the path of paying towards this scheme for their employees.

    So for Govt employees this is good scheme, but for private employees this is ok scheme.


  167. Sachin says:


    Nice and brief article on NPS.
    But you missed one point.
    Tier-I and Tier-II.

    I case of Tier-I, we cannot withdraw the amount, whereas in case of Tier-II we can withdraw the amount.

    Tier-II is still not rolled out, but will be launched soon.
    Overall your article is good as usual.


  168. Manish Chauhan says:


    Under following circumstances your account may be closed before attaining retirement age?

    – death
    – account value reduces to zero
    – change in citizenship status.

    Currently the whole picture is still fuzzy on many aspects for NPS , the biggest of them is the tax on the maturity amount .

    It would be wise to wait for some time before Entering it .


    1. Prasad says:

      Do you have anyupdates for Viral questions?
      What happens to the corpus after the death of the spouse?


      1. Actually I dont have it right now , I havent look in deep . Do you want to take up this and find out ? Do some google search and find out and update us πŸ˜‰


        1. Prasad says:

          After the death of the spouse a new pension account will be created for spouse if he/she wishes.Entire corpus will be transferred to the new account. I enquired this in CAMS info center. However all other PoP don’t even have an idea of NPS

          1. great that you added this information πŸ™‚


  169. Manish Chauhan says:


    I dont think its NPS for you . It must be normal providend scheme of Govt like EPF . You need to clear this with your Department where you work , They must be able to give you details of where can you see the amount accumulated till now .

    Returns from Equity Mutual Funds are not taxable after 1 yr . So if you get any profit after 1 yr in Equity mutual funds , its all yours as per current laws .


    1. Amit says:

      It is NPS for Rajnish and me too………Govt. Pension has been stopped for employees joining on or after 01.01.2004.

  170. viral jani says:

    PFRDA site has given following information about death of PRAN holder.
    the amount can be disbursed as pension to SPOUSE of PRAN holder.
    but what about corpus left after death of spouse.
    will that be given to family members especially children as lump sum or on a monthly pension format?
    there is no clear answer for this.

  171. rajnish kumar says:

    hye manish, i am a govt employee and joined on 06-09-2004. for us already NPS exit which is 10% of (basic pay + DA) everymonth.govt will contribute same amount everty month. can i see online how much total contribution worth as of now. ???if yes where and what is the procedure. ???? is return generated from MF is Taxable in long run( 25years + )

    1. jay says:

      it might be GPF.. Govt Provident Fund..

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