State Bank of India (SBI) National Pension System: All you need to know

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State Bank of India National Pension System: All you need to know
State Bank of India National Pension System: All you need to know

New Delhi : India's largest public sector bank, the State Bank of India (SBI) is offering National Pension System (NPS) for providing social security to all citizens of country. NPS is a government scheme offered as a part of the pension sector reforms.

It is regulated by the Pension Fund Regulatory and Development Authority (PFRDA). Interested people between the age group from 18 years to 65 years can avail the benefits of NPS. But, before opening an NPS account it is necessary to know these important things.

State Bank of India National Pension System Benefits

NPS account type: NPS usually two types of accounts are opened, one tier-1 and one tier-II. Tier-I account is completely pension account, where withdrawal is not permitted, Tier-II account is known as an investment account wherein withdrawal is allowed. This information is recorded on the official website of SBI.

Minimum investment: According to the SBI, the subscribers have to invest at least Rs.1000 in the tier-1 account within one year as a minimum contribution. While the minimum requirement for minimum investment in Tier-II account is not applicable.

Interest rate: The interest received on NPS depends entirely on the pension fund manager (PFM), which the account holder chooses. The account holder is allowed to change his PFM once during a financial year.

Maturity Period and Clearance: According to SBI's website, NPS is locked up to 60 years of age in the account. Withdrawal is allowed before 60 years but in this situation 80 percent of corpus has to invest in annuity, this is tax free withdrawal.

Tax Benefits: In Tier I account of NPS, tax benefit is available, whereas no such facility is provided in Tier II account.

For more information on NPS, please visit the official website of SBI, sbi.co.in