NPS Account in SBI: National Pension System (NPS) is a retirement scheme of the Government of India.
NPS Account in SBI: The National Pension System (NPS) is a retirement scheme of the Government of India. Earlier it was started for the people of government jobs, but from 1 May 2009, the NPS facility was made available to all citizens. Its objective is to provide financial security to all citizens of the country after retirement. You can also open an account in it and plan for the future. It is very easy to open an account in it. The country’s largest government bank SBI (SBI) also provides the facility to open this account. You can take advantage of this facility by following a very easy process.
Any citizen of India, who is between 18 and 65 years of age, can take part in this scheme after some necessary procedures. Under this, customers of the bank (registered as Point of Presence or PoP), who want to open an NPS account through their bank’s Internet banking facility, can open an NPS account by getting an OTP on their registered mobile number. The responsibility of investing the amount deposited in the NPS is given by the PFRDA to the registered pension fund managers. They invest your investments in equity, government securities and non-government securities as well as fixed income instruments.
What is required for NPS account in SBI
Only bank customers can open online NPS accounts with SBI. The age of the participant of the scheme should be at least 18 years and maximum 60 years. KYC is required to open an account. Important documents include address proof, account opening form, identity proof and birth certificate.
How to open online account
- To open an online NPS account, you must have the net banking facility of SBI.
- For this, first go to www.onlinesbi.com.
- After that enter your user ID and password and have to log in.
- After opening the homepage, you have to go to the Payment and Transfer tab and select ‘NPS contributions’.
- In order to contribute to the NPS account, the necessary process has to be completed.
- Once the process is complete, the amount that has to be deposited in the account every month, will be deducted from the bank savings account itself.
- Your contribution will continue till the age of 60 years after the account is opened.
How much subscription
According to SBI, a minimum subscription of Rs 500 is required at the time of opening a Tier-1 account, while a minimum subscription of Rs 1000 is required at the time of opening a Tier-2 account. As an operation charge of NPS account, the bank also charges you in exchange for different types of transactions or service. Apart from this, you also have to pay GST.
Tax benefit too
According to the SBI website, if you have opened a Tier-1 account, then you get tax exemption under Section 80 CCD (1B) of Income Tax on the subscription of Rs 50,000, excluding tax-saving provisions. Similarly, for investments (basic salary + 10 per cent of DA) within the total limit of Rs 1.5 lakh, there is a tax exemption under 80 CCE. There is a provision of tax deduction (basic salary + DA) up to 10 percent of salary under 80 CCD (2) without any monetary limit.
How to get benefits: NPS calculator
Monthly investment in NPS: Rs 6000 (Rs 72,000 annually)
Total contribution in 30 years: Rs 21.60 lakh
Estimated Return on Investment: 8%
Total amount on maturity: Rs 90 lakh
Annuity purchase: 50%
Estimated Annuity Rate: 6%
Maximum tax free withdrawal: Rs 54 lakhs (60% of maturity amount)
Pension at the age of 60: Rs 22500 per month
One time cash: 45 lakhs
(Note: We have considered the average age of the investor here to be 30 years. At the same time, it has made a monthly contribution of Rs. 6 thousand. Here we have done a calculation on purchasing annuity with 50% amount on NPS calculator. In National Pension System (NPS) It is necessary to buy an annuity of at least 40 percent in the plan.)