Andhra Bank National Pension Scheme

What is NPS? 

National Pension Scheme (NPS) is aimed at creating a retirement income based on regular deposits by subscribers. The NPS invests your contribution into market initiatives like equities and debts. The NPS promises lifetime pension post-retirement from the corpus created earlier. 

The return on the equities and debts becomes your pension post-retirement. The interest rate usually ranges from 9% to 12% per annum, but it can vary. The interest rate depends on the performance of the asset class. 

The money contributed is invested primarily into four asset classes mentioned below: 

• E – Investments in stocks (maximum limit 50%)

• C – Corporate debts 

• G – Investments in debt (gilt) funds (in government securities)

• A- Alternative Assets 

What are the Investment Choices for Corpus Creation?

NPS offers two ways to invest your money:

• Active Choice: Under this choice, you can choose the asset class and you can decide the share of NPS deposits between the asset classes.

• Auto Choice: Lifecycle fund is the default option available under NPS. The management is based on your age profile and is decided by the appropriate authority. 

NPS Account in Andhra Bank: Eligibility and Process

You are eligible for the National Pension Scheme if:

• You are a citizen of India. This scheme is also open for overseas citizens of India and NRIs. 

• You fall under the 18-65 age limits as of the date of application. 

Note: You can also join after 60 and contribute till 70 years to your NPS account. 

Opening an NPS account requires some mandatory documentation. The bank will need your Identity proof as well as your Address Proof. 

You can submit your Ration Card, Passport, PAN card, Driving License, etc., as proof of identity. You can submit a bank passbook or your electricity bill as your address proof.

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How to Open an NPS Account in Andhra Bank?

The PFRDA has included Andhra Bank as one of the entities for the National Pension Scheme. First, you should have an NPS account in Andhra Bank to invest in the NPS. All the branches of Andhra Bank act as Point of Presence (POP) service providers. You can easily invest in NPS through any branch of Andhra Bank in the country. 

There are two ways to open an NPS account in Andhra Bank, on-site and online: 

• On-Site through Andhra Bank: You can visit your nearest Andhra bank’s branch for opening an NPS account. You need to duly fill-up the subscriber registration form to open an NPS account in Andhra Bank. 

• Next, you have to fill up the Contribution slip. Attach all your KYC documents to your forms and pay the required fees at the bank. Your details are then verified by the bank, and then Andhra Bank would open an NPS account for you. 

• You can also reach out to the branch manager to know more about how to open an NPS account in Andhra Bank. 

• For Online Registration: You need to follow these steps:

• Open the official website of the bank and choose to apply online. The registration can be done in two different ways: using your PAN card or your Aadhaar Card. 

• Registering via Aadhaar Card: You’ll need your Aadhaar Number and the linked mobile number to register online. The KYC through Aadhaar will require a One Time Password (OTP) to be entered. Your details are then fetched through your Aadhaar card credentials. You need to fill in all the required details and upload your signature. 

• Your registration completion will require you to pay the fees for your NPS account. Multiple payment options are available online.

• Registering via PAN card: You need to have a Permanent Account Number to register via this option. You need to have a bank account linked with the bank you choose for NPS. The details provided should match your hitherto details with the bank. You’ll have to upload your signature and your photo. To complete the registration, you have to pay the registration amount online.  

Types of NPS Accounts

The two types of NPS accounts are known as the Tier 1 and Tier 2 account. 

• Tier 1 account: Investing 10% of basic salary along with DA and DP is mandatory for government employees. The investments cannot be withdrawn before the age of 60. The minimum opening contribution and minimum subsequent deposit are Rs 500 for Tier 1 account. The minimum contribution annually should be Rs 6000, and one contribution per year is mandatory. 

• Tier 2 account: You should have a tier 1 account for this. The minimum opening contribution is Rs 1,000. Subsequent deposits of Rs 250 are required, and the annual contribution should be at least Rs 2000. One contribution per annum is mandatory. 

Both these account types place no limit on the maximum contribution you can make.

NPS Account in Andhra Bank: Salient Features  

Andhra Bank provides you with various reasons to invest in NPS from their bank. Any citizen of India can opt for it, and an NPS account can be operated from any location in the country. 

It offers tax benefits. As a deduction, Investments up to Rs 1.5 Lakhs are allowed. You can also claim further deductions up to Rs 50,000 under section 80 CCD 1B. At the time of maturity, you can withdraw 60% of the corpus. This withdrawal is tax-free. This establishes it as a scheme that reduces your tax burden throughout till its maturity.

Next thing that sets it apart is the variety of pension payment options. You can opt for a joint life pension, which will support your spouse in case of your untimely demise. Because it is market-linked, the returns are well adapted to inflation, and your retirement corpus is well-tailored.  

Andhra Bank offers you the Permanent Retirement Account Number (PRAN) Card. The process of application is simple and transparent. 

Difference Between Atal Pension Yojana (APY) and the NPS

The National Pension System offers tax benefits that set it apart from APY and other conventional pension schemes. Atal Pension Yojana is for the age group 18-40, while the NPS extends to 60 years. 

NPS can be opted for by NRIs and Overseas citizens, unlike APY, which extends to Indian residents only. APY has definite slabs of payments, while the slabs for NPS are subjective and market-linked. Andhra Bank offers both APY and NPS to its customers. 

In Conclusion

The National Pension System Scheme is a reliable scheme that yields good returns post-retirement. Having an NPS account in Andhra Bank unlocks a new way to a sustainable retirement income alongside tax benefits. You should choose to build your tomorrow today.

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