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How good is SBI National Pension Scheme?

The Pension Fund Regulatory and Development Authority of India launched National Pension Scheme on 1st May, 2009. This scheme was introduced as an initiative to provide pension security to the old age citizens of our country. The major objective of this scheme is to allow the oldies of our country to avail a beneficial market based return over a long period of time.

For the comfortability of the customer, now SBI is also one of the banks where the applicant can open SBI National Pension Scheme account.  

In order to apply for SBI National Pension Scheme the individual need to follow some important eligibility criteria, these are:-

1.   In order to open an account in SBI National Pension Scheme, one should age between 18 to 60 years.

 

2.    On basis of KYC norms the individual should keep handy documents like

·        Photo ID Proof

·        Address Proof

·        Date of Birth Proof

·        Application Form

 

3.     In case of Tier 1:

·        Under tier 1 minimum contribution for account opening is Rs500

·        Rs500 is the minimum amount payable for every contribution

·        At the end of every financial year Rs6000 is the minimum account balance required.

·        Minimum number of contribution yearly should be at least once.

 

4.     In case of Tier 2 :

·        For opening an account minimum contribution of Rs1000 is required.

·        Rs250 is the minimum amount payable for every contribution.

·        Rs2,000 is the minimum account balance required at the end of every financial year.

·        Minimum number of contribution yearly should be at least once.

 

5.     If an individual wants to open a tier 2 account then he/she will have to open an active tier 1 account first for activation tier 2 account.

6.   Once the composite application is being made together for tier 1 and tier 2, a minimum contribution of Rs1500 is made at the time of account opening.

7.    For the composite application, submission of the cancellation check is required.

 

Charges Imposed for SBI National Pension Scheme:-

Here we have explained briefly the subscription charges that are imposed for opening the account.

1.     Rs100 per person is the initial subscription registration charge.

2.     0.25% of initial contribution amount is required to be paid by every individual for subscription.

3.     The minimum contribution amount is Rs20 whereas the maximum contribution can be of Rs25,000.

4.     Rs20 is charged for other transactions that are not for subscribers.

 

 

Some of the major benefits that are offered by SBI National Pension Scheme are-

 

1.    Every citizen of India that falls between the age group pf 10-60 (resident-non- resident) can open an NPS account. National Pension System is available to both self-employed and employees persons. 

2.   Under section 80CCD of Income Tax Act, NPS investments are eligible for tax  exemptions of up to Rs1.5 lakh per year.

3.     Equity is the most beneficial way gain return on investments for the long term. Not many 80C products allow acquiring exposure to equity and one of them is NPS.

4.  Among all the investment options available, NPS has one of the lowest cost structures. The Pension Fund Regulatory and Development Authority (PFRDA) manage the money by charging as little as 0.01%. 

5.  One can easily open an NPS account either by visiting the nearest Point of Presence Service Provider or through online eNSDL.

6.     One can continue to keep on investing in NPS up to 70 years of age, even if the person has attained 60 years of age.

7.   An additional option has been introduced for subscribers who want to opt for Auto Choice Scheme Preference with a new variant of Life Cycle Fund.

 

Some of the Salient Features of SBI National Pension Scheme are:-

 

1.   One can open an account at Point of Preference Service Provider Banks that accepts the application form and the required documents and registers the subscribers with Central Record Keeping Agency (CRA) to generate the Permanent Required Account Number.

2.     The PRAN number is further required for quoting all the future transactions.

3.     The scheme provide the options of tier 1 and tier 2

 

Opening an NPS account is a wise decision as it is an affordable investment plan for the retirement years of an individual and besides this one can also avail tax benefit.   If you are planning to open an NPS account 

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Tuesday, 23 July 2019

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