Under the NPS, you can invest sums of money at regular intervals into your pension account and also have the option of taking a part of the corpus as lump sum amount and the balance in the form of fixed monthly income, as and when you desire the same.
What are the benefits of opening an account with the NPS
NPS can be opened by any citizen of India. Individuals can choose the amount they want to set aside and save every year. This would help in extending old age security coverage & income to all citizens.
Another important feature is that you can choose your own investment option and the Pension Fund Manager of your choice.
It is portable
An interesting feature of the NPS is that it is portable. This means that you can operate your account from anywhere in the country, even if you change your city, job or your pension fund manager.
NPS is regulated
The NPS is regulated by the Pension Fund regulatory and Development Authority. The investment norms are transparent and regular monitoring and performance review of fund managers by NPS Trust.
You can avail of tax benefits under section 80 C of the Income Tax Act. This means that you can get tax benefits to the tune of Rs 1 lakh per annum.
It's possible to get reasonable returns, of course one cannot guarantee returns, if the investment option chosen is equities.
In any case there are several benefits of NPS, and investors with a long term horizon would do well to opt for the same.