Business Desk – NPS or National Pension System has been launched by the Government Of India in 2003 as a part of pension sector reforms. The main objective of NPS is to provide security to Indian citizens. It is regulated by PFRDA which means Pension Fund Regulatory And Development Authority.
It is a tax-efficient and flexible retirement savings account. It provides financial security to their subscriber. However, there is no defined benefit at that time of exit, it depends on the contributions made. The investment of the individual is divided into diversified portfolios – Government Bonds, Bills, Corporate Debentures, and shares. The investment grows over the year and returns earned depend on the investment you made.
Not only residents of India can open an account but also NRI ( Non-Resident Indian) is allowed to open an NPS account. Here is how.
How NRIs Can open an NPS account?
When opening an NPS account, subscribers get a PRAN which means Permanent Retirement Account Number. It helps to identify your portfolio.
The NPS is structured in two tiers: Tier-I account and Tier-II account. Tier- I account is a non-withdrawable permanent retirement account in which subscribers are credited and invested as per the fund manager chosen. Tier-II account is a voluntary withdrawable account allowed only if a subscriber has an active Tier – I account. In this subscriber withdrawals are permitted as per the need.
For NRIs, they can only open Tier – I NPS accounts. Also, to open an account they need to have Aadhaar cards. NRIs can open an NPS account online by visiting PFRDA official website.
According to the data of September 24, 2022, the total subscribers under NPS is 571.86 lakhs (5.72 crore) and the total assets are 7,99,467 crore (7.99 trillion).