The National Pension Scheme or NPS offers two account types- Tier 1 and Tier 2, designed for retirement savings and flexible investments. In this video, we’ll explore the features of both accounts.
The Tier 1 account acts as your primary pension savings vehicle, requiring regular contributions with limited withdrawal options. It offers tax benefits under Sections 80C and 80CCD(1B). This could make it a tax-efficient way to build a retirement corpus. On the other hand, the Tier 2 account provides voluntary savings flexibility and might allow you to make withdrawals without restrictions. However, it offers no tax benefits unless you’re a Central Government employee.
We’ll also discuss the investment options available in NPS, including active and auto choices. Active choice might let you allocate funds across asset classes such as equity, corporate debt, government securities, and alternative investments. Auto choice could automatically manage your portfolio based on your age and risk profile.
Finally, we’ll walk you through how to open these accounts. Be it through the official NPS website, PoP service providers, or the e-NPS platform. Investing in NPS could help you plan effectively for a secure retirement.
9
