Federal Bank- National Pension Scheme (NPS)

What is the Federal Bank- National Pension Scheme (NPS)?

The Federal Bank NPS is a defined contribution pension scheme that encourages regular savings for retirement. Introduced by the Government of India in 2004 and publicly available since 2009, it provides a steady income post-retirement. Federal Bank acts as a Point of Presence (PoP) to facilitate NPS for its customers and the public.

Features of the Federal Bank NPS

The National Pension Scheme (NPS) offered by the Federal Bank has several important features designed to help individuals save for retirement:

1. Investment Options:

   • All Citizen Model: Open to all individual investors.

   • Corporate Model: Employers can contribute on behalf of their employees.

2. Account Types:

   • Tier I Account: Mandatory for retirement savings.

   • Tier II Account: Optional with more flexible withdrawal options.

3. Investment Strategies:

   • Active Choice: Investors manage their portfolios.

   • Auto Choice: Automatic investment management based on age.

4. Annuity Options:

   • Choose an annuity plan provider for regular pension payments on retirement.

5. Pension Fund Management:

   • Choose your pension fund manager for customized investment management.

6. Tax Benefits:

   • Contributions, partial withdrawals, and lump sum withdrawals are tax-efficient, with deductions available under Section 80 CCD(1) and 80 CCD(1B).

Eligibility Criteria to Apply for the NPS Account in Federal Bank

To apply for the NPS Account in the Federal Bank, the following criteria must be met:

• Age: 18 to 70 years old.

• Residency: Open to Indian citizens and NRIs.

• KYC Compliance: Valid KYC documents are required for registration.

Steps to Invest in the Federal Bank NPS

Investing in the NPS through the Federal Bank can be done in two ways:

1. Investing Through the Branch

   • Visit a Branch: Federal Bank has over 1,069 designated branches for NPS investments. You can find a list of these branches on the Federal Bank website.

   • Obtain Registration Form:

     • Fill out the subscriber registration form, which varies for individual, NRI, and corporate investors. 

     • Fill out the NPS Contribution Instruction Slip, which can be downloaded online.

   • Submit Documents: Along with your registration form and contribution slip, provide KYC documents and your initial subscription amount. The bank will verify your details before opening your account.

2. Investing Online

   • Visit the Website: Go to the Federal Bank NPS page and click on "Open NPS Online."

   • Register via NSDL: You will be redirected to NSDL’s website to complete your online registration.

   • Fill Out Application Form: Provide all necessary details in the online application form and upload scanned copies of your documents.

   • Account Opening Options: You can register using either your PAN or Aadhaar number.

   • Make Payment: Pay your subscription amount online. Once verified, your online NPS account in Federal Bank will be opened promptly.

NPS Account Opening Form for NRI in Federal Bank

Non-Resident Indians (NRIs) can invest in the National Pension Scheme (NPS) through the Federal Bank by completing a simple process. Here is a step-by-step guide:

Steps to Open an NPS Account in Federal Bank

• Visit Federal Bank’s Website: Go to the official Federal Bank website to begin the process of NPS for NRI.

• Access the NRI Registration Form: Navigate to the NPS section and locate the NRI Subscriber Registration Form.

• Complete the Form: Fill in your personal details, including name, address, and contact information, accurately.

• Gather KYC Documents: Submit the following documents with your form:

  • Passport copy

  • Valid visa or residence permit

  • Indian address proof (e.g., utility bill or bank statement)

• Submit an NPS Contribution Slip: Download, fill out, and include the NPS Contribution Instruction Slip from the Federal Bank website.

• Submit Documents: Offline: Visit a designated Federal Bank branch in India with your documents or upload your documents through the Federal Bank NPS portal if available.

• Make an Initial Contribution: Deposit a minimum of ₹500 for a Tier I account as per the guidelines.

• Verification and Account Activation: The bank will verify your application and documents. Once verified, your NPS account in Federal Bank will be activated.

Documents Required for the Federal Bank- National Pension Scheme (NPS)

To open an NPS account in Federal Bank, you will need the following documents:

• Recent photographs

• Identity Proof: PAN card, Aadhaar card, or voter ID.

• Address Proof: Aadhaar, utility bills, or passport.

• Age Proof: Birth certificate, Aadhaar, or school leaving certificate.

• Bank Details: Canceled cheque or bank passbook.

For Online Applications:

• Scanned copies of your PAN card or Aadhaar card

• A cancelled cheque from your bank account

Contributions to the NPS Account in Federal Bank

To maintain an active NPS account in Federal Bank, you must meet certain minimum contribution requirements:

Tax Benefits: Contributions up to ₹2 lakh are eligible for tax deductions under Sections 80 CCD (1) and Section 80 CCD(1B).

Real-World Example

Let us say you invest ₹10,000 monthly in an NPS Tier I account of the Federal Bank NPS Scheme for 30 years. Assuming a return of 9% annually, you will accumulate a substantial corpus of ₹1.83 crore on retirement under this pension plan. At retirement, you can invest the ₹73.22 lakh of your corpus to purchase an annuity.

The Federal Bank NPS Calculator simplifies planning by estimating the retirement corpus and monthly pension based on your contributions, helping you make informed decisions effortlessly.

Conclusion

The Federal Bank NPS offers a systematic approach to retirement savings with flexible investment options, tax advantages, and ease of access both online and offline. It is a great way to secure your financial future while benefiting from tax savings along the way.