Bank of Baroda is a leading public sector bank in India which offers a range of banking solutions to its customers. You can make deposits, investments and also avail funds through loans. The facility of opening an NPS account is also offered by the bank as it is authorized to allow NPS contributions.
In this article
What is the NPS scheme?
The National Pension System (NPS) is a long term investment scheme with the help of which you can build up a retirement corpus. The scheme is a pension oriented scheme wherein, upon maturity, you get guaranteed pensions from the corpus accumulated during the investment period. The NPS scheme is a market-linked scheme wherein returns are in sync with the market movements and allow you to create an inflation adjusted retirement corpus.
Opening Bank of Baroda NPS Account
To invest in the National Pension Scheme Bank of Baroda offers you easy modes of opening an account in your name. There are two ways in which you can subscribe to the National Pension Scheme in Bank of Baroda. Here are the two ways of opening the BOB NPS Account –
The online mode has become a popular way of investments as internet access is now available to most individuals. So, if you also want to open an online BOB NPS account, you can do so easily. Here are the steps which you would be required to take for the same –
- Visit https://www.bankofbaroda.in/nps.htm and click on ‘Explore’ under the option ‘Open NPS Account Online’
- You would be taken to a new page wherein you would get the message that the bank allows online NPS account opening through Karvy Computershare Private Limited.
- Click on ‘Accept’ to be redirected to Karvy’s website wherein you can apply for online Bank of Baroda NPS Account
- You would have to enter all the details in the online form which is displayed
- Thereafter you should upload your KYC documents and the scanned copy of your signature for verification
- Make the payment for the first contribution to the NPS scheme to open the account online
- Once your details are verified by the bank, your Bank of Baroda NPS Account would be opened quickly
If you prefer investing in the National Pension Scheme in Bank of Baroda through the offline mode, you would have to visit the branch of the bank for opening the NPS account. All the branches of Bank of Baroda are authorized POP-SPs (Point of Presence Service Providers) and you can approach any of the nearest branches of the bank to apply for the NPS scheme. At the branch, there would be a subscriber registration form which you should fill up to apply for the NPS scheme. Submit the form with your KYC documents and the bank would verify your details. Once the verification is successfully done, your NPS account would be opened.
Eligibility for opening Bank of Baroda NPS Account
While it is easy to open an account of NPS, Bank of Baroda does require you to fulfil some eligibility parameters before you can apply for the scheme. These eligibility parameters are also required by the NPS scheme in general and include the following –
- Individuals aged between 18 and 65 years
- You should be an Indian citizen whether you are a resident Indian, an NRI or an OCI
- You can also open an NPS account as an employer-employee group
- If you are aged above 60 years, you can deposit into the NPS account only till you reach 70 years of age
Contribution to the NPS scheme
There are two types of BOB NPS accounts and the contribution in these accounts differs. Let’s understand how –
- Tier I Account
The first account which you would find is the Tier I Account which is mandatory if you subscribe to the NPS scheme. This account allows tax benefits and does not allow withdrawals, except in specific cases, before maturity. To open a Tier I Account, you would have to make a minimum contribution of Rs.500. Thereafter, in one financial year, a minimum contribution of RS.1000 would be required to keep the account active. There is, however, no limit on the maximum contribution which you can make.
- Tier II Account
Tier II Account is a voluntary account which you can open if you want but only after you have a valid Tier I Account. Tier II Account is flexible and it allows you free withdrawals. However, investments in this account do not qualify for tax benefits except for Central Government employees and that too with specific terms and conditions. To open a Tier II Account, you would have to make a minimum contribution of Rs.1000. Thereafter, you need to contribute at least Rs.250 to the account every financial year to keep it active.
Tax benefits on National Pension Scheme in Bank of Baroda
NPS is a tax-saving avenue which gives you multiple benefits both when investing in the scheme and when withdrawing or redeeming money from the scheme. Here are the different types of tax benefits which can be availed from a Bank of Baroda NPS Account –
- Contributions to Tier I Account are allowed as a deduction under Section 80CCD (1). The limit of deduction available is Rs.1.5 lakhs which includes deductions under Section 80C
- Additional contributions can also be claimed as deduction under Section 80CCD (1B) up to a maximum of Rs.50, 000
- Employer’s contribution, up to 10% of the employee’s basic salary + Dearness Allowance, would be allowed as a deduction under Section 80CCD (2)
- Partial withdrawals are completely tax-free provided they fulfil the terms and conditions of withdrawal from the scheme
- On maturity, up to 60% of the corpus could be availed as a tax-free income
These tax benefits make the NPS scheme an attractive investment avenue for retirement planning. So, invest in the NPS scheme and choose Bank of Baroda for a seamless investing experience.