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According to the United Nations Population Fund (UNPF), India has the largest millennial and Gen Z population on Earth. Gen Z encompasses those born between 1997 and 2012, while millennials include individuals born between 1981 and 1996. With the rising population, increasing cost of living, and improved life expectancy, it’s crucial for Indian young professionals to invest in retirement planning to build a financial safety net for their future. And one of the ways to find financial stability in the golden years is to enroll in a pension scheme.
The National Pension System
The National Pension System, also known as the NPS or National Pension Scheme, offers financial stability for retirement days and helps you achieve your financial dreams. Initiating the process of NPS account opening is straightforward. NPS registration is voluntary and accessible to all Indian citizens aged between 18 and 70. NPS is also considered as one of the most economical options available.
Eligibility for NPS Account Opening
Before you can open an NPS account online, there are specific conditions you need to meet. These eligibility criteria include being a citizen of India or an OCI (Overseas Citizen of India), and your age must fall within the range of 18 to 70 years at the time of opening the NPS account. Additionally, you’ll be required to provide various details such as the nominee’s name, profession, Aadhaar information, PAN, and other necessary personal information.
The process of registering for NPS online is relatively quick and can be completed in just a few minutes. However, if you opt for offline registration, it typically takes longer, often more than 10 days, to complete. If you’re curious about calculating your potential NPS returns, read the blog on NPS calculator here.
National Pension System Account Opening Benefits
- Government Regulated: NPS is regulated by PFRDA (Provident Fund Regulatory and Development Authority), a government entity that monitors NPS and ensures transparency.
- Power of Compounding: The NPS account not only provides savings but also invests in various market-linked securities. It can multiply your returns by leveraging the benefits of compounding over a period of time.
- Attractive Returns: NPS invests in market-linked securities such as corporate bonds, government securities, equities, and alternate investment funds. It offers attractive returns, but this also comes with some element of risk.
- Monthly Income after Retirement: With an NPS account opening, you also open doors to receiving a monthly pension during your retirement years. You can withdraw up to 60% of your tax-free corpus, and the rest 40% will be used to buy annuities to get a monthly pension.
- Systematic Lumpsum Withdrawal (SLW): Now instead of a one-time lump sum withdrawal, you can also withdraw your desired amount at regular, periodic intervals while the rest continues to be reinvested for additional returns.
- NPS tax benefit: The NPS account provides tax benefits of ₹1.5 lakhs and additional tax benefits of ₹50,000 under Section 80CCD 1(B) of the Income Tax Act.
- Diversification: NPS diversifies your portfolio by allocating your funds among equities and other investment instruments, which lowers the risk and provides potentially high returns.
How to apply for NPS Registration?
Open your account through the KFintech NPS website in a few minutes. Follow the steps below:
- Visit nps.kfintech.com
- Click on ‘Join NPS’; you will be redirected to a new page
- Enter your personal details, like your email, your date of birth, your marital status, etc
- Accept the terms and conditions
- Click on ‘Create an account’; you will be redirected to the NPS page
Conclusion
Planning for your retirement early is key to enjoying a stress-free life during your golden years. By investing in NPS, you’re laying the groundwork for a prosperous future. NPS account opening is a hassle-free process that only takes a few minutes of your time while ensuring stability in your retirement years.
