Canara Bank was founded in Mangalore, Karnataka in 1906 and was then nationalised in 1969. The bank has since then been a public sector bank owned and managed by the Government of India. Canara Bank offers complete banking solutions to its customers and investing in the NPS scheme is one such facility which the bank offers.
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What is the NPS scheme?
National Pension System (NPS) was launched by the Government as a retirement oriented pension scheme. Under this scheme, investors can contribute over a long term horizon and build up a retirement corpus. The investments done towards the NPS scheme provide market-linked returns so that you can create a corpus that is in sync with the economic inflation. After maturity, the NPS scheme pays guaranteed pensions that create a source of income in your older years.
Investing in Canara Bank NPS
To invest in the Canara Bank National Pension Scheme there are two options available to you. Canara Bank allows you to invest online or offline as per your suitability. The process of investing in Canara Bank National Pension Scheme under both modes is as follows –
Offline investment in Canara Bank NPS
To open a Canara Bank NPS account offline, you would have to visit the designated branch of the bank. Canara Bank is allowed by the PFRDA (Pension Fund Regulatory and Development Authority) to act as a Point of Presence for NPS account opening. The bank has designated some of its branches as POP-SPs (Point of Presence Service Providers) from where you can invest in the NPS scheme offline. So, visit these POP-SPs of Canara Bank and apply for opening the NPS account.
An application form would be available at the branch for subscribing to the NPS scheme. You would have to avail the form, fill it up and submit it at the branch with your KYC documents to apply for a Canara Bank NPS account. The form can also be downloaded online from the bank’s website using the link https://www.canarabank.com/media/1587/cs-s1afsr.pdf. Along with the form, the amount of contribution required to open the Canara Bank NPS account and the relevant bank charges should also be submitted. Once your details are verified, the account would be opened by the bank and you would get a PRAN (Permanent Retirement Account Number) which would help you track your NPS account and the growth of investments.
Online investment in Canara Bank NPS
If you want to invest in the National Pension Scheme, Canara Bank also allows you the facility of online investments through its website. To invest in the Canara Bank NPS scheme online, you should visit the link https://canarabankcsis.in/nps/ and register yourself as an NPS subscriber. Provide your first name, date of birth, mobile number, email ID and enter the captcha code. An OTP would be sent to the mobile number which you have provided. Enter in the OTP to proceed and complete the registration process.
Once you have registered for NPS in Canara Bank through online mode, your account would be opened at the earliest after the bank verifies your details.
Documents required for NPS in Canara Bank
To open a Canara Bank NPS account, either online or offline, you would have to submit some documents. These documents include the following –
- Your identity proof like Voter’s ID Card, Aadhaar card, passport, PAN Card, driving license, etc.
- Your address proof like Voter’s ID Card, Aadhaar card, passport, driving license, etc.
- Your age proof like driving license, voter’s ID card, Aadhaar card, birth certificate, etc.
- PAN Card or Aadhaar card
- Cancelled cheque of your bank account
Features of NPS in Canara Bank
Here are some of the salient features of Canara Bank National Pension Scheme –
- You can open the Canara Bank NPS account if you are aged between 18 and 60 years
- There are two types of investment accounts. The first is the Tier I Account which you would have to open if you want to invest in the NPS scheme. The second is the Tier II Account which is voluntary and can be opened if you already have an active Tier I Account
- There are two types of investment strategies in the NPS scheme. The first one is the Active Choice Strategy under which you have control over investing and managing your investments. The second one is the Auto Choice Strategy wherein you choose your risk profile and then your investments are allocated to different funds in a predefined manner. You have to choose the investment strategy when investing in NPS
- There are four types of investment funds available under the Canara Bank National Pension Scheme. These are Asset Class A, C, E and G
- Indian residents, as well as NRIs, can invest in the NPS scheme
- You have to contribute a minimum amount of Rs.500 to open a Tier I Account and Rs.1000 to open a Tier II Account
- NPS investments give you tax benefits
- On maturity, you get guaranteed pensions throughout your lifetime
Tax benefits of NPS in Canara Bank
The NPS scheme gives you different types of tax benefits, both when investing in the scheme and on maturity. These benefits are as follows –
- Investments into the Tier I Account are allowed as a deduction under Section 80CCD (1) up to a maximum of Rs.1.5 lakhs. This limit also includes the deductions available under Section 80C
- Additional investments also qualify for deduction under Section 80CCD (1B) up to a maximum of Rs.50, 000. This deduction is allowed over and above the limit of Rs.1.5 lakhs allowed under Section 80CCD (1)
- If your employer contributes to the NPS scheme on your behalf, such contributions, up to 10% of your basic salary including dearness allowance, would be allowed as a deduction under Section 80CCD (2)
- On maturity, withdrawal of up to 60% of the corpus is allowed in a lump sum. This lump sum withdrawal is treated as a tax-free income
The NPS scheme, therefore, allows you to build a tax-efficient retirement corpus through regular, affordable contributions. Start an NPS scheme in your name to plan for your retirement and to do so, you can choose Canara Bank which offers you easy facilities of opening a Canara Bank NPS account.