Understanding the National Pension System
Government of India introduced National Pension System [NPS] with an intention to provide social security to the common public. The unorganized sector can get the benefit of regular income after the earning age in the form of pension. During the earning age, one can contribute towards the NPS, and on attaining the superannuation age i.e. 60 years, he / she can get the pension from the corpus that is contributed till then. Karnataka Bank has tied up with Pension Fund Regulatory and Development Authority (PFRDA) for providing NPS services to our customers in association with NSDL e-Governance Infrastructure P. ltd. which is the approved Central Record Keeping Agency (CRA) by PFRDA for the NPS scheme.
By investing in to the scheme, customer will get not only pension but also get additional income tax relief under Section 80 CCD(1)(b) for investment made up to Rs. 50,000/- over and above the tax relief available under Section 80 (C) of the Income tax Act. A Subscriber to NPS will have two-tiered account; namely Tier I and Tier II. While every registration to the scheme is under the Tier I account; the Tier II account is optional to the Subscriber flexible withdrawal options. Selection of Pension Fund is mandatory both in Active and Auto Choice. If the customer decides not to select any Fund Manager at the time of registration, then the Fund Manager by default will be SBI Pension Fund Regulatory and Development Authority (PFRDA).
The contributions made by the customers will be invested in various funds by the Fund Managers. Normally the customer can contribute to Tier I account from his/her attaining 18 years of age till the completion of the 60th year ,and, with special request, he/she can continue to contribute up to maximum age of 70 years. On attaining the age of 60 years [Superannuation], the Subscriber can opt for Commutation up to a maximum of 60% of the Outstanding Fund Value [Corpus]. However, only 40% of the commutation is Tax Free ,the remaining 20 % of the Commuted Amount is taxable as per the extant tax guidelines and remaining 40% of such Outstanding Fund Value [Corpus] is mandatorily to be utilised as Annuity (pension), in the current tax structure . In simple terms, 40% can be commuted and remaining 60% will be used as Annuity. In case if the Subscriber so desires, he/she can, defer the receipt of pension for a further period of 3 years from his Superannuation ,i.e. up his 63rd year. Customer can approach any our branch for availing the scheme or email: nps@ktkbank.com
Designed for your golden years
Portable and regulated
NPS provides seamless portability across jobs and across locations, unlike all current pension plans. It provides hassle-free arrangement for the individual subscribers
Pension fund manager
Individuals can switch over from one investment option to another or from one fund manager to another,
subject to certain regulatory restrictions.
Tax benefits
Claim a tax deduction up to 10% of the gross income under Section 80CCD (1) within the overall ceiling of Rs.1.5 lakh, under section 80CCE
Investment variety
Access a wide array of asset classes for investment and tailor your portfolio to match your risk appetite
Wide tenur
Keep contributing to your NPS account up to the age of 70, ensuring a larger corpus for your retirement
Tax-efficient withdrawal
Enjoy up to 60% of the corpus can be withdrawn tax-free at retirement.
Be active or passive
Opt for active or auto choice in fund management to align with your investment style
Nationwide network
Opt for active or auto choice in fund management to align with your investment style
Types of NPS accounts
Choose from Tier I & Tier II under the scheme
Tier I
- The Tier I NPS account is meant for subscribers to contribute their savings for retirement into a non-withdrawable account. These savings can include an employer’s contribution to NPS, in case of the corporate sector.
- This is mandatory to open in order to join NPS. Withdrawal from this account is conditional and restricted.
Tier II
- The Tier II NPS account is a voluntary savings account from which subscribers are free to withdraw their savings whenever they wish.
- An active Tier I account is a pre-requisite for opening a Tier II NPS account.
- Withdrawal from this account is permitted as per the requirement of the subscriber.
Explore our fund managers
Choose from our highly-experienced fund managers for your pension
Mutual fund investment methods
Eligibility criteria
- Any Indian citizen, whether resident or non-resident/Overseas Citizen of India (OCI)
- Age must be between 18 to 70 years
- Maximum age up to which an NPS account can be continued is up to 75 years
- Join the NPS scheme either as employee-employer group(s) (corporates) or individuals
How to apply
Point of Presence - Service Providers
Any citizen of India between the age of 18 to 70 can open NPS account by visiting any POP-SP
Got questions? We’ve got answers.
NPS is a voluntary pension scheme introduced by the Indian government to provide a stable pension to citizens post-retirement.
You can choose from several fund managers. If not chosen, SBI Pension Funds Pvt. Ltd. is the default manager.
At 60, you can withdraw up to 60% of your corpus. 40% is tax-free, and the rest is used for an annuity.
Tier I is the primary pension account with tax benefits, while Tier II is a voluntary savings account with more flexible withdrawal options.
NPS is regulated by the Pension Fund Regulatory and Development Authority (PFRDA), ensuring strict compliance with investment guidelines to safeguard your savings.
Upon reaching retirement age, NPS subscribers receive a pension based on the accumulated savings in their account, which can be drawn regularly, offering a steady income stream in their post-retirement years.
NPS subscribers can claim a tax deduction up to 10% of their gross income under Section 80CCD(1), with an additional deduction for contributions up to ₹50,000 under Section 80CCD(1B), within the overall ceiling of ₹1.5 lakh under Section 80CCE.
Yes, NPS subscribers have the flexibility to switch from one pension fund manager to another, subject to regulatory restrictions, enabling them to tailor their investment strategy.
Participation in NPS is voluntary and open to all Indian citizens, particularly targeting the unorganized sector for providing post-retirement financial security.
The NPS account offers seamless portability across jobs and locations. It ensures that individuals can move their pension fund without any hassle if they change employment or relocate, making it a convenient option for today's mobile workforce.
Pension schemes are designed to provide financial security during retirement. They ensure a steady income stream post-retirement, helping maintain your standard of living. Pension schemes can be government-sponsored or privately managed, each offering various plan options to suit individual retirement goals. Investing in a pension scheme also encourages disciplined savings over a long period, which is crucial for a financially secure retirement. Additionally, contributions to certain pension schemes can qualify for tax deductions. The national pension system (NPS) is a long-term retirement-focused investment. Our nps scheme offers an opportunity to build a substantial retirement corpus with added national pension system benefits. Gain from the nps benefits and ensure financial security in your golden years.
In pension schemes, the return on investment is a critical factor. The returns can be fixed or market-linked, depending on the type of scheme. For example, government pension schemes like the National Pension System (NPS) offer market-linked returns, while traditional pension plans provide a guaranteed return. Understanding the return structure, associated fees, and the annuity options available upon retirement is essential.
