National Pension System Calculator is a handy tool which illustrates the lump sum amount and tentative pension money which a subscriber can expect on maturity. This tool helps investors to make an informed decision about their investment patterns during their earning years to build sufficient corpus post-retirement stage. The NPS calculator gives an investor precise information on a go.
What is the National Pension Scheme (NPS) Calculator?
The National Pension Scheme or NPS Calculator is a tool used to illustrate the arrive at the pension or the lump sum amount which the subscriber of the scheme can expect on maturity or at the age of 60 years.
The total accumulated amount on maturity will be on the regular monthly contributions made by an investor towards the scheme, rate of return on investment, percentage of amount reinvested for purchase of annuity and so on.
The NPS is a government of India backed retirement pension scheme hence the returns from it are guaranteed.
By investing in the national pension scheme, an investor can reach their desired financial goals and enjoy the fruits of benefits post-retirement. The invested amount in NPS gets compounded. So NPS turns out to be one of the most preferred forms of retirement wealth plan.
The higher the investment made in the scheme, the higher will be the returns and vice-versa. All an investor has to do is to either make a regular deposit either monthly or yearly.
Eligibility for National Pension Scheme
- Any Indian Citizen can open an NPS account.
- The minimum age for opening an NPS account is 18 years.
- The maximum age limit for opening an NPS account is 65 years.
- An applicant can open only one National Pension Scheme account.
- The applicant should be compliant with Know Your Customer (KYC).
Features of the National Pension Scheme (NPS) Account
The following are the list of features of the NPS account:
- The NPS account is a government-sponsored pension scheme rolled out to help individuals to accumulate wealth for their retirement days hence the returns are fully guaranteed.
- An investor can open an NPS account either through offline or online mode.
- A part of the invested amount in NPS will go towards equities.
- The returns fetched by the national pension scheme is better as compared with other forms of government rolled investment options like PPF or Post Office Savings Account.
- The annualized returns from a National Pension Scheme ranges between 9% - 12%.
- An investor can claim for deduction of Rs 1,50,0000 per annum under Section 80CCD(1) of the Income Tax Act. An additional benefit of Rs 50,000 will be available under Section 80CCD(2) of the Income Tax, bringing up the total to Rs 2,00,000 per annum.
- If in case, an investor is dissatisfied with the fund’s performance, then they can change the fund manager as per their convenience.
- A minimum contribution of Rs 500 has to be made yearly towards the NPS account.
- In case of Tier – I account, the investors should make an annual one-time contribution in the range between Rs 500 – Rs 6000.
- In the case of Tier – II account, the investors should make an annual one-time contribution in the range between Rs 500 - Rs 2000.
- Investors have an option to withdraw for up to 3 times in 5 years of intervals during the entire tenure of investment.
- An investor can withdraw only up to 60% of the accumulated fund post-retirement, the remaining 40% will be invested in the pension scheme so that post-retirement, they can receive a regular pension amount.
- Investors can withdraw up to 25% of the accumulated funds after completion of three consecutive years beginning from the date of opening an NPS account. The funds from this scheme can be utilized for meeting an emergency purpose like the purchase of a house, for footing the medical bills, for children higher education expenses and so on.
Who can use NPS Calculator?
Any individual who is eligible to invest in NPS can use the NPS calculator to estimate the wealth accumulated for a given investment amount.
An investor who falls in the age bracket between 18 – 65 years can invest in the scheme. They will have to comply with the KYC norms before starting their investment.