How can NRIs secure retirement with National Pension Scheme; key rules for eligibility

NRIs can invest in the National Pension Scheme (NPS) through a Tier-1 account. While Tier-2 accounts are restricted, NRIs can secure a pension by following KYC norms and making minimum contributions.

ZeeBiz WebTeam | Oct 07, 2024, 04:30 PM IST

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Non-Resident Indians (NRIs) are eligible to invest in the National Pension Scheme (NPS) and build a solid retirement fund. They can open a Tier-1 NPS account to take advantage of long-term savings benefits, while contributions to Tier-2 accounts are restricted. NRIs must comply with KYC norms and can register either online via the official eNPS portal or offline at authorized branches. Through NPS, NRIs can enjoy retirement savings along with a regular pension after the age of 60.

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Eligibility Rules for NRIs in NPS

NRIs can invest in NPS Tier-1 account:

NRIs are allowed to open and invest in a Tier-1 NPS account. However, they are prohibited from contributing to a Tier-2 account.

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KYC compliance is mandatory

NRIs must fulfill the Know Your Customer (KYC) norms to open an NPS account.

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How NRIs Can Open an NPS Account

Online Registration: NRIs can register through the official eNPS website by:

Selecting "National Pension System" (NPS) and choosing the "NRI" option.
Providing basic details such as date of birth, PAN, mobile number, and email ID.
Completing the registration by following the steps for document submission and verification.

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Offline Registration

NRIs can also open an account by visiting any authorized Point of Presence (POP) branch, submitting the required documents such as:

Aadhaar card

PAN card

Passport copy

Cancelled cheque

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Minimum Contribution:

The initial contribution to open an NPS account is Rs 500. After registration, NRIs are issued a Permanent Retirement Account Number (PRAN) which needs to be verified within 90 days.

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Types of NPS Accounts for NRIs

Tier-1 Account: This is a mandatory account for all NPS subscribers. For NRIs, 60% of the total accumulated amount can be withdrawn as a lump sum at retirement, while 40% must be used for purchasing an annuity, which provides a pension.

Tier-2 Account: This account is optional and allows more flexible withdrawals, but NRIs are not eligible to contribute to the Tier-2 account.

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Key Takeaways for NRIs

NRIs can enjoy the benefits of NPS by opening a Tier-1 account.

A minimum Rs 500 contribution is required to get started.

60% withdrawal at retirement is allowed, and 40% is used for pension.

NRIs are ineligible for Tier-2 account contributions.

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