Canara Bank NPS Scheme

What is the Canara Bank NPS Scheme?

The Canara Bank NPS Scheme is a retirement planning solution under PFRDA, where subscribers contribute periodically to build a retirement corpus. Upon retirement, individuals can withdraw a portion as a lump sum and use the rest to buy an annuity plan for regular income.

The NPS Scheme aims to ensure financial stability post-retirement, promote a culture of saving among citizens, and provide tax benefits on contributions.

Features of the Canara Bank NPS Account

The key features of the Canara Bank NPS account are as follows:

Flexibility: Regular and voluntary contributions allowed.

• Dual Tax Benefits: Tax deductions under Section 80CCD(1B) and Section 80CCD(1).

• Low Cost: Low fund management and operational costs.

• Professional Fund Management: Investment handled by expert fund managers.

• Multiple Fund Options: Choose from equity, corporate, and government securities.

• Withdrawal Options: Partial withdrawals permitted for specific purposes.

Eligibility Criteria to Apply for NPS in the Canara Bank

To open an NPS account with Canara Bank, applicants must meet the following criteria:

• Age: Between 18 and 70 years.

• Citizenship: Indian citizen or Non-Resident Indian (NRI).

• KYC Compliance: Must complete Know Your Customer (KYC) requirements.

How to Open an NPS in the Canara Bank?

Opening an NPS account at Canara Bank involves the following steps:

• Visit a Branch or Online Portal: Go to the nearest Canara Bank branch or use the online platform.

• Fill Application Form: Complete the NPS application form with required details.

• Submit KYC Documents: Provide necessary documents like PAN card, Aadhaar, and address proof.

• Initial Contribution: Make the minimum initial contribution as specified.

• PRAN generation: Receive your Permanent Retirement Account Number (PRAN) for future NPS login.

How to Open an NPS in Canara Bank for NRIs

For Non-Resident Indians (NRIs), the process is similar but requires additional documentation:

• Eligibility check: Confirm eligibility as an NRI under PFRDA guidelines.

• Document verification: Submit identity proof, address proof, and NRI status proof.

• Complete the form: Fill the NPS application form available at Canara Bank.

• Fund transfer: Contribute using an NRI Account (NRE/NRO accounts).

Documents Required for the Canara Bank NPS Scheme

To open an NPS account, applicants need to provide:

• Identity Proof: PAN card, Aadhaar card, passport.

• Address Proof: Utility bill, bank statement.

• Photograph: Recent passport-sized photograph.

• Bank Account Details: For auto-debit facility.

Contributions to the Canara Bank NPS Account

• Minimum Contribution to Open NPS Account: ₹500 per contribution or ₹6,000 annually in NPS Tier-I account and ₹250 per contribution in Tier-II account.

• Frequency: Contributions can be made monthly, quarterly, or yearly.

• Top-ups: Voluntary top-ups are allowed in this pension plan for flexibility.

Example of NPS Scheme in Canara Bank

Raj, a 30-year-old professional, opens an NPS account at Canara Bank. He contributes ₹60,000 annually for 30 years. Assuming a 10% annual return, his corpus grows as follows, as calculated with Policybazaar NPS Calculator:

• Total Maturity Amount at Retirement= ₹1.14 crore

• Withdrawable Lump Sum Amount = ₹68.4 lakh

• Minimum Annuity Amount = ₹45.6 lakh

• Monthly Pension Amount = ₹18,994 (as 40% of maturity amount is invested in the best annuity plan).

Conclusion

The Canara Bank NPS scheme is a beneficial investment option for building retirement savings. It offers good NPS interest rates, tax benefits, professional fund management, and flexibility, making it a suitable choice for both residents and NRIs. You should start early to maximize your retirement corpus and live a secure golden life.