National Pension System is a market-linked retirement savings tool that can be used by you to save funds after retirement.
It is a market-linked scheme and hence can offer a higher rate of return than other retirement schemes like PPF.
You can invest in the NPS account from 18 years of age till retirement and earn a good interest rate on your investment.
Indian Overseas Bank is one of the most prominent Governments of India Banks and is also a point of presence for the NPS scheme. It has been authorized by the Pension Fund Regulatory and Development Authority (PFRDA).
In this article, we will discuss how to open an NPS account in Indian Overseas Bank, Documents required, Pension Fund manager, Features, etc.
Table of Contents
Features of NPS Account
The following are the features of the NPS Account which make it a very attractive option for retirement funds-
- It is a voluntary scheme that is open to all individuals to invest and earn profit
- The scheme is a market-linked scheme meaning the investment made will be invested in the market by the fund managers and can offer a higher rate of interest than any other scheme
- NPS Scheme is relatively safest as compared to others because this scheme also has an option to invest in Government and Corporate securities
- You can start investing in the account for as low as Rs.1000/- per annum
- Can Open NPS Account through online and offline means by Point of presence as well as eNPS portal respectively
Types of NPS Account
The following are the types of NPS Accounts with their features-
Tier-I
- This is a mandatory account that every NPS Account holder will be provided with
- The investment made in the NPS account is rigid meaning the scope of liquidation is very low
- The tax benefits offered by the NPS account is up to 1.5 lakhs and an additional Rs.50,000/- can be saved in tax benefits
Tier-II
- This is a voluntary account meaning you have an option to opt for this account
- The investment made in the NPS account is flexible and you can withdraw the funds whenever you want
- There are no tax benefits under the NPS Tier-II account
Returns on the NPS Scheme for the year 2021
Tier-I
| Pension Fund Managers | Returns* | |||
| 6-month | 1-year | 3-year | 5-year | |
| HDFC Pension Fund | 9.16% | 9.56% | 14.72% | 11.90% |
| UTI Retirement Solutions | 7.71% | 8.77% | 13.50% | 11.85% |
| SBI Pension Fund | 8.26% | 9.73% | 13.49% | 11.38% |
| ICICI Pension Fund | 9.56% | 9.30% | 13.11% | 11.12% |
| Kotak Mahindra Pension Fund | 9.30% | 9.28% | 13.00% | 11.12% |
| Reliance Pension Fund | 7.51% | 9.15% | 12.05% | 10.32% |
| LIC Pension Fund | 7.07% | 8.13% | 11.86% | 10.22% |
| Aditya Birla Pension Fund | 6.22% | 7.12% | NA | NA |
Tier-II
| Pension Fund Managers | Returns* | |||
| 6-month | 1-year | 3-year | 5-year | |
| HDFC Pension Fund | 9.20% | 9.47% | 14.87% | 11.50% |
| UTI Retirement Solutions | 7.54% | 9.39% | 13.66% | 11.96% |
| SBI Pension Fund | 8.24% | 9.71% | 13.50% | 11.39% |
| ICICI Pension Fund | 9.64% | 9.32% | 13.16% | 11.14% |
| Kotak Mahindra Pension Fund | 9.29% | 9.54% | 13.03% | 11.12% |
| Reliance Pension Fund | 7.34% | 8.94% | 12.08% | 10.32% |
| LIC Pension Fund | 6.83% | 8.51% | 11.74% | 8.97% |
| Aditya Birla Pension Fund | 5.81% | 6.61% | NA | NA |
How to Open an NPS Account in Indian Overseas Bank?
You can follow these steps to open an NPS Account in the Indian Overseas Bank-
- Visit the nearest Indian Overseas Bank branch and ask the bank representative for the NPS account opening form. It is also known as the PRAN application form
- After receiving the form, fill out the form with correct details like name, address, bank details, father’s name, nominee details, etc.
- After filling out the form, attach the documents mentioned below and submit it to the bank representative along with the initial deposit amount
- Now, the bank representative will review your application and forward it to the relevant department
- After successful processing, you will be issued with a PRAN account number using which you can access your NPS Account easily
Documents Required for opening NPS account in Indian Overseas Bank
The following are the documents required for Opening the NPS account in Indian Overseas Bank-
- Scanned Photograph of the applicant
- Scanned photograph of the signature
- Aadhar Card
- PAN Card
- Mobile number (registered with Aadhar and Bank)
- Email ID
Pension Fund Manager List
Pension Fund managers are those entities that manage your investment by investing it in key securities and shares.
Based on the market condition and opportunity, the fund manager will tweak the investment basket and try to reap maximum benefits.
The following are the pension fund manager list that you can choose from-
- LIC Pension Fund Limited
- SBI Pension Funds Private Limited
- HDFC Pension Management Company Limited
- ICICI Pension Fund Management Company Limited
- UTI Retirement Solutions Limited
- Kotak Mahindra Pension Fund Limited
- Reliance Capital Pension Fund Limited
- Birla Sunlife Pension Management Limited
FAQ
You can open the National Pension Scheme right from the age of 18 years up to the age of 60 years.
Yes, you can get a Tax benefit for investing in the NPS Account up to Rs.1.5 lakhs under the Income Tax Return section 80D and an additional Rs.50,000/- can be saved under section 80CCD(1B).
No, an NPS account is a market-linked scheme and does not provide a guaranteed return however, the returns on the investment are fairly attractive and the investment made through NPS is safest among the other market-linked schemes.
Yes, annuity schemes are the schemes that pay you monthly or however your preferred pension payments schedule is to your account. A minimum of 40% of your matured amount must be reinvested into an annuity program. The rest 60% of the funds matured can be withdrawn in a lump sum.
Yes, NRIs can invest in the NPS Account, however, Persons of Indian Origin and Overseas Citizens of India are not allowed to invest in the NPS account. The NPS Account can get immediately lapsed if you choose to take citizenship of the host country.
I’m Shiv Kumar, a graduate with a passion for finance, marketing, and technology. My journey into finance started with a desire to understand money management and investing.
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