If you are an employee in a private company or a self-employed person, you can also get a pension like a government employee. For this, you have to open a new pension system (NPS) account.

NPS is a means of saving money for a government-sponsored retirement scheme, which is regulated by the Pension Fund Regulatory and Development Authority (PFRDA). For government employee, it was launched in 2004.

NPS allows two types of accounts one is Tier I and other is Tier II. Customers can contribute through Net Banking and Debit / Credit Cards in the NPS account with the help of the online platform eNPS portal.

How to open an NPS account?

You must have a citizen of India, whether resident or non-resident. Anyone 18 to 65 years of age can open an NPS account. This account can also open online. Here is the complete process:

  1. To open an account, the user must have a bank account with the facility of active mobile number, e-mail ID and net banking.
  2. According to the eNPS portal, it is necessary for the applicant to provide PAN card information to open an NPS account.
  3. The applicant must activate PRAN to start an NPS account or run an existing NPS account online.PRAN or Permanent Retirement Account Number is a unique 12 digit number provided to each subscriber under NPS.
  4. The user must first go to the National Pension System section of the eNPS portal.
  5. eNPS offers portal registration and deposit option. It also activates Tier 2 account under NPS section.
  6. To complete the application, the user will have to fill all the necessary information and one out of the given two options will have to select Tier 1 and Tier 2 account and Tier 1 account.
  7. After entering the necessary information, the user will have to upload his scanned photo with signature.

When you withdraw your money?

NPS withdrawal is permitted after 3 years of subscription. Tier 1 is known as a retirement NPS account which includes Tax breaks. It is a  non-withdrawable until the age of 60. The minimum amount for Tier-1 is Rs. 500/- and maximum is Rs. 1,000/-.

While Tier 2 is a non-retirement account. Private employees and businessman can invest in it and withdraw their money anytime without penalties but remember you can invest in a Tier II account only if you have an active Tier I account.

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