Types of NPS
It is a mandatory account you get when you start your NPS policy. Most of the NPS benefits are exclusi
ve to tier-1 accounts.
is needed to open an NPS tier 1 account. You must invest at least
per year to keep the account active.
Tax Benefits of Ti
er 1 Account
up to ₹2 lakhs
are eligible for 80C deduction,
, which can
be claimed under Section 80CCD (1B).
At 60, you can withdraw 60%
of your corpus. The remaining gets converted to an annuity to receive a pension for the rest of your life.
NPS tier 1
60% corpus withdrawal is exempt from tax
, making it an extremely tax-friendly option.
for NPS Tier I
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Scanned image of signature
Tier 2 Account
This account is
voluntary and available to all NPS tier I users
with flexible withdrawal rules who want a secondary investment account.
No KYC Requirement
Since you need to submit all the KYC documents for the tier 1 account, there is
no KYC submission is required for the tier 2 account
The minimum initial investment required to open a Tier 2 account is
. You can choose not to contribute yearly to the Tier 2 account.
No Withdrawal Limi
There are no withdrawal limits set on this account. You can
invest in & withdraw from an NPS tier 2 account anytime
Limited Tax Benefits
Since Tier 2 Account is not mandatory, it
doesn’t include tax benefits
for non-government employees.
Should You Invest?
NPS is one of the
most beneficial retirement schemes
as it invests in equities. If you are a risk-averse investor, you can also choose low-equity options.
Earn 9 - 11%
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