Yes Bank National Pension Scheme

What is the NPS Scheme?

The National Pension System (NPS) is a retirement plan launched by the Government of India to encourage individuals to save systematically. Initially restricted to government employees, it was extended to all citizens in 2009. NPS is a defined contribution, market-linked pension plan that allows participants to build a retirement corpus through regular investments, offering both flexibility and growth potential.

What is Yes Bank NPS Account Scheme?

Yes Bank is authorized by the Pension Fund Regulatory and Development Authority (PFRDA) to provide NPS services. Individuals can invest in NPS through designated Yes Bank branches that serve as Point of Presence Service Providers (POP-SPs). A complete list of these branches is available on the Yes Bank website.

Eligibility Criteria for NPS Investments

Below is the eligibility criteria for NPS Yes Bank:

• You must be between 18 and 70 years old.

• You must be an Indian citizen, including NRIs and OCIs.

• You must comply with Know Your Customer (KYC) norms.

• You must be legally competent to enter into a contract under the Indian Contract Act.

• PIOs and HUFs are not eligible.

• NPS is an individual account and cannot be opened on behalf of a third person.

How to Apply for Yes Bank NPS Scheme?

Below are the steps to open an NPS account in Yes Bank:

1. Locate a Designated Branch

   Identify the nearest Yes Bank branch authorized as a POP-SP (Point of Presence - Service Provider) for NPS investments.

2. Fill Out the Forms

   • Obtain and complete the Subscriber Registration Form available at the branch, ensuring all details are filled accurately.

   • Fill out the NPS Contribution Instruction Slip (NCIS) to specify your initial contribution details.

3. Submit Documents

   Attach the required documents, including:

   • KYC documents for identity and address verification.

   • Two recent coloured passport-sized photographs.

4. Make the Payment

   • Pay the contribution amount to fund your NPS account.

   • Settle the applicable registration charges as per Yes Bank’s policy.

5. Receive Your PRAN

   Upon successful registration, you will receive a Permanent Retirement Account Number (PRAN), which serves as your unique account identifier.

6. Continue Contributions

   Use your PRAN to make annual contributions and manage your NPS account through Yes Bank.

Benefits of Yes Bank NPS Account

Below are the benefits of NPS Yes Bank:

• Tax-free lump sum withdrawal of 60% of the corpus at maturity.

• Lifelong pension with multiple annuity options.

• Flexibility in investment management and fund manager selection.

• Low-cost structure with market-linked growth opportunities.

Charges Under Yes Bank NPS Scheme

Yes Bank levies specific charges for NPS accounts, categorized into one-time and regular charges, as per PFRDA guidelines. These charges include:

• Registration Charges: NPS accrue of ₹200 for account setup.

• Contribution processing charges: A charge of 0.25% of the contribution amount is applied each time a contribution is made, with a minimum fee of ₹20 and a maximum cap of ₹25,000.

• Non-Financial Transaction Fees: ₹20 for any non-financial transaction.

• Account Maintenance Charges: Annual fees of ₹50 for managing the account.

Details About NPS Investments

NPS investments are designed with two account options, each serving distinct purposes based on your financial goals:

1. Types of Accounts

   Tier I Account

   • Purpose: This is the mandatory retirement account under NPS, specifically designed for long-term savings.

   • Features:

     • Withdrawals are restricted to ensure disciplined retirement savings.

     • A partial withdrawal of up to 25% is allowed after three years for specific purposes such as higher education, marriage, house purchase, or medical emergencies.

     • At maturity, 60% of the corpus can be withdrawn tax-free as a lump sum, while the remaining 40% must be used to purchase an annuity for a regular pension.

   • Ideal For: Individuals focused on building a retirement corpus with tax-saving benefits.

   Tier II Account

   • Purpose: This is an optional account offering greater flexibility, acting more like a savings account with no withdrawal restrictions.

   • Features:

     • Contributions can be withdrawn at any time without any specific conditions.

     • It doesn’t offer the same tax benefits as the Tier I account unless the investor is a Government employee.

   • Ideal For: Investors looking for liquidity while still benefitting from NPS's market-linked returns.

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2. Types of Investment Options in NPS

   NPS provides two flexible investment strategies, allowing you to tailor your portfolio based on your risk appetite and financial goals:

   Active Choice

   • Control: Investors have complete control over their asset allocation.

   • Asset Classes:

     • Equity (E): Up to 75% can be allocated to equities, offering higher returns but with greater risk.

     • Corporate Debt (C): Investments in high-rated corporate bonds, balancing risk and return.

     • Government Securities (G): Investments in government bonds, ensuring low-risk and stable returns.

   • Flexibility: You can adjust the allocation percentages based on your investment preferences.

   • Ideal For: Individuals who are financially savvy and wish to actively manage their portfolios.

   Auto Choice

   • Control: The asset allocation is managed automatically based on your age.

   • Lifecycle Funds:

     • Aggressive Life Cycle Fund: Higher equity exposure in the early years (up to 75%), reducing with age.

     • Moderate Life Cycle Fund: Balanced equity exposure (up to 50%), declining as you approach retirement.

     • Conservative Life Cycle Fund: Minimal equity exposure (up to 25%), ideal for risk-averse individuals.

   • Benefit: This option ensures your investments are managed efficiently without requiring active involvement.

   • Ideal For: Individuals preferring automated investment strategies aligned with their age and retirement timeline.

Pension Fund Managers

Under this scheme, you have the flexibility to choose from eight Pension Fund Managers (PFMs) to manage your investments. Furthermore, you can change your selected fund manager during the investment period if needed, ensuring your funds are aligned with your financial goals and market conditions.

Your contributions grow with the performance of financial markets, enabling you to accumulate a substantial retirement corpus. At maturity, you can withdraw up to 60% of the corpus as a tax-free lump sum, providing immediate liquidity for major expenses. The remaining 40% is used to purchase an annuity, ensuring guaranteed lifelong pension income.

The scheme also offers a variety of pension payment options, allowing you to customize how you receive your post-retirement income.

Conclusion

Yes Bank’s NPS account scheme provides a reliable pathway to financial security during retirement. By investing through Yes Bank, individuals can leverage expert guidance, systematic savings, and efficient account management to build a robust retirement corpus.