NPS or national pension scheme is a market-linked voluntary contribution scheme. It helps investors save money for their retirement and save taxes too. It may be a good scheme for people who seeking higher returns and can take moderate risks.
It is available to all Indian citizens. However, according to the Ministry of Finance's notification on July 5,2003-ECB-PR dated December 22, 2003, NPS is mandatory for Central Government employees who began service on or after January 1, 2004, except those in the armed forces.
The NPS voluntary model is open to all Indian citizens, including those residing abroad, aged 18 to 70.
NPS is divided into two tiers: Tier-I account and Tier-II account.
The pension calculator shows the estimated pension and lump-sum amount you may anticipate at maturity based on regular monthly payments, a percentage of the corpus reinvested to purchase an annuity, and projected rates for investment returns and annuity selection.
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A person needs to contribute at least once per financial year to the NPS account. If he fails to do so, his account will be frozen and he will need to pay a penalty along with paying the minimum contribution for the year.