Planning for a secure future has never been more important in this fast-paced world. Learning how to invest in NPS (National Pension System) offers a golden opportunity to build a financial cushion for your retirement while providing excellent tax benefits. The National Pension System (NPS) offers a golden opportunity to build a financial cushion for your retirement while providing excellent tax benefits. And now, it's even easier to open an NPS account online with the YONO SBI App , your one-stop solution for seamless banking and financial transactions. Enjoy a paperless experience with YONO's user-friendly interface that simplifies your journey to financial security.

Understanding the National Pension System

The National Pension System (NPS) is a government-backed retirement savings scheme that enables Indian citizens to systematically contribute towards their retirement fund.

What is National Pension System?

The National Pension System (NPS) is a voluntary, long-term investment platform that offers mix of equity and fixed-income investment options, making it a flexible choice for individuals seeking financial security post-retirement.

The National Pension System (NPS) offers two account types -- Tier I and Tier II – designed to help investors build their retirement savings. While both accounts facilitate retirement savings, they differ in several key aspects:

Tier I Account

This is the primary NPS account focused on long-term retirement savings. Some key features include:

• Eligibility: Available to Indian citizens between 18 to 70 years of age
• Minimum Investment: ₹500 initially with minimum annual contribution of ₹1000
• Tax Benefits: Combined tax deductions of up to ₹2 lakh under Section 80C and 80CCD (1B)
• Withdrawals: Up to 60% of the corpus can be withdrawn at the retirement age of 60. The remaining 40% must be used to purchase an annuity plan for regular pension income
• Lock-in: Investments are locked in until the age of 60

Tier II Account

This acts as an investment account offering more flexibility than the Tier I account. Key aspects are:

• Eligibility: Can only open a Tier II account along with a Tier I account
• Minimum Investment: ₹ 1000 while opening the account and min contribution of ₹ 250 per year.
• Tax Benefits: No tax benefits on contributions/gains available
• Withdrawals: Unrestricted withdrawals
• Lock-in: No lock-in period. Allows investors to access money as needed

Under PFRDA (Pension Fund Regulatory and Development Authority) guidelines, NPS funds can be managed by certified pension fund managers, including institutions like SBI Pension Funds. Based on risk appetite, investors can choose from active and auto-choice funds across asset classes like equity, corporate bonds, and government securities. This flexibility enables investors to optimize the growth potential of their retirement corpus while aligning with their financial goals. It also empowers investors to invest in NPS through a range of fund managers and portfolio strategies.

How to Open an NPS Account through YONO SBI App: NPS Account Opening Online

Opening an NPS account through YONO SBI App is simple and convenient

Step 1: Download and Install the YONO SBI App

If you haven't already, head to Google Playstore or App store and download the YONO SBI App. It's available for both Android and iOS devices.

Step 2: Register or Log In

If you're new to the app, follow the registration process. For existing users, simply log in using your credentials.

Step 3: Navigate to NPS Account Opening

Once you're in the app, navigate to the 'Investments' section. Here, you'll find the key features/ benefits of NPS and the option to open NPS account.

Step 4: Provide Necessary Details

Basic details are auto populated while you'll need to fill in additional information such as place, country of birth, and parent details.

Step 5: Nomination

Designate a nominee for your NPS account. Maximum 3 nominees are permitted in each Tier. Nominee for Tier I and Tier II may be same or different.

Step 6: Choose Your Investment Preferences and payment

Understanding how much to invest in NPS is crucial - To open Tier I NPS account, the minimum initial contribution amount is ₹500. The minimum initial contribution amount in Tier II required while opening NPS account is ₹1000.

Step 7: Digital Consent through OTP

Complete the process by entering OTP sent on registered mobile number to submit your digital consent. This digital consent ensures the authenticity of your application.

Conclusion

The National Pension System offers a perfect balance of retirement security and tax benefits. With the YONO SBI App, opening an NPS account becomes a seamless and efficient process, putting you on the path to a secure financial future. Learning how to invest in NPS online through the YONO SBI platform empowers you to manage your retirement savings from anywhere, at any time.

Whether you're a young professional looking to save on taxes or planning for retirement, NPS through YONO SBI App offers the flexibility and accessibility you need for seamless financial planning. Embrace the power of technology and take the first step towards building a comfortable future with the National Pension System.