India Post offers a range of facilities to Indian citizens besides delivering posts. You can save and invest with the post office with different types of savings accounts and deposit schemes. Moreover, the post office also allows you to invest in the National Pension System which was introduced by the Government.
The Government of India introduced the retirement-oriented National Pension System (NPS) for the common public in May 2009. This is a long-term investment scheme wherein you have to invest every year till you reach 70 years of age. The investment is market-linked wherein the money that you invest is allocated to market-linked funds for inflation-adjusted growth.
On maturity, you are allowed to withdraw a part of your corpus as a lump sum benefit while the remaining part of the corpus is used to pay annuities for your lifetime.
The post office has been authorized by the Pension Fund Regulatory and Development Authority (PFRDA) to act as a Point of Presence (POP). A POP is a designated place from where you can invest in the NPS scheme. So, if you are looking to invest in the National Pension Scheme, you can visit the nearest post office and apply for the same.
All the Head Post Offices in India serve as a POP Service Provider that allows you to invest in the NPS scheme in the post office. You can visit these head post offices and invest in the NPS scheme offline. For investing in the National Pension Scheme in the post office, the steps are as follows –
To open an account of the National Pension Scheme, the post office has specified an eligibility requirement which you should fulfil. These requirements are as follows –
To subscribe to post office National Pension System, the following transactional charges would have to be paid –
The NPS scheme is a market-linked scheme and there is no guaranteed national pension scheme interest rate. When you subscribe to the scheme, you have to open a Tier I Account compulsorily. You are offered a choice of two investment strategies.
Under the Active Choice option, you get four types of investment funds – Asset Class E, C, G, and A. Asset Class A invests in alternate instruments and you can invest a maximum of 5% in this fund. You can then choose to invest in the other available funds as per your investment preference and risk appetite. The other option is the Auto Choice strategy.
If you choose this option, you would be given a choice of three risk profiles – Aggressive, Moderate, and Conservative. Thereafter, depending on the risk profile that you choose, your investment would be allocated to Asset Class E, C, and G in predefined proportions. You can switch between the investment strategies and also change the chosen funds under the Active Choice strategy.
You should also choose the pension fund manager for managing your investments. There are eight pension fund managers which are –
On maturity, you can withdraw up to 60% of the corpus in a lump sum. This would be tax-free in your hands. The rest of the corpus would be used to pay annuities. You can choose from a list of different annuity providers to receive annuity payments.
Moreover, there are different types of annuity payment options that you can choose as per your requirements.
The post office calculator is an easy-to-use and hassle-free tool, Post Office National Pension Scheme Calculator calculates the lump sum to be received by entering basic details that are related to the scheme.
Here are some of the benefits which you can get when you invest in the NPS scheme in the post office –