Punjab National Bank was founded in the year 1894 by Lal Lajpat Rai and it started its operations from April 1895. It is, therefore, one of the oldest banks of India which has grown over the years with a large customer base. The bank has also started offering online banking facilities to its customers for ease and convenience. The National Pension Scheme is one such banking facility which Punjab National Bank offers both online as well as offline.

What is the National Pension Scheme?

The National Pension Scheme is a voluntary retirement saving scheme wherein you can accumulate a retirement corpus over your working life and receive guaranteed pensions after retirement. The NPS scheme is a defined contribution scheme wherein the pension amount depends on the amount that you invest. Your investments are allocated to market-linked funds to provide the best returns and grow an inflation-adjusted retirement fund.

Salient features of the NPS scheme

Here are some important aspects of the NPS scheme –

  • The scheme is managed and administered by the PFRDA (Pension Fund Regulatory and Development Authority)
  • There are eight fund managers authorized by the PFRDA to manage your investments. You can choose any of these fund managers and also switch between them during the investment tenure
  • There are four types of investment funds. These are Asset Class A (which invests in alternate instruments), C (which invests in corporate debt), E (which invests in equity) and G (which invests in Government securities)
  • You can choose to invest in a combination of the available investment funds as per your risk appetite and investment profile if you choose the Active Choice investment option
  • If, however, you choose the Auto Choice investment option, your investments would be automatically allocated to Asset Classes E, C and G based on the risk profile that you choose
  • Tier I Account is the compulsory account which you should open when you invest in the scheme. This account does not allow free withdrawals but allows partial withdrawals for specific situations
  • Tier II Account is a voluntary account that you can open if you need. This account is flexible and allows free withdrawals whenever needed
  • The minimum contribution to start a Tier I Account is Rs.500 and Tier II Account is Rs.1000. You should contribute at least once in a financial year in the NPS account till maturity.
  • On maturity, you get guaranteed pensions for your lifetime. You can commute 60% of the corpus in lump sum and pensions would be paid from the remaining 40% of the corpus.

Investing in Punjab National Bank NPS

Punjab National Bank is an authorized Point of Presence (POP) which offers NPS investments. You can invest in NPS in PNB either from any of the branch of the bank or through the online mode. Here is the detailed process of investing in Punjab National Bank NPS through both modes –

  • Through the bank branch

To invest in the National Pension Scheme, Punjab National Bank has various branches which you can visit to open the NPS account offline. All the branches of the bank serve as Point of Presence Service Providers (POP-SPs) allowing you to invest with ease. Just visit the nearest branch of the bank and fill up a subscriber registration form. Submit this form with your KYC documents, the minimum amount of contribution required to open the NPS account and the applicable bank charges. Once the application is done, the bank would process the application and your NPS account would be opened. You would be allotted a Permanent Retirement Account Number (PRAN) for your NPS investment which would be communicated to you by the bank.

  • Through the bank’s website

Being a technologically advanced bank, Punjab National Bank also allows you the online facility of investing in NPS. To do so you should visit the link and click on ‘Subscriber Registration: Click Here’. A new page would open which is the registration page of NSDL with which the bank is tied-up for online NPS account opening. On the page, you should click on ‘Registration’. Proceed with providing all the necessary information on the online application page. You would need a mobile number and an email ID to invest in NPS online through this mode. Registration can be done in two ways – either using your Aadhaar or through your PAN Card. Choose the desired mode of registration and provide the scanned copy of your documents. Also, pay the contribution amount online as well as the applicable charges and your Punjab National Bank NPS account would be opened at the earliest.

Documents required for NPS in PNB

To open a Punjab National Bank NPS account, the following documents should be submitted both on the offline and online modes –

  • Identity proof
  • Age proof
  • Address proof
  • Photographs
  • PAN Card and cancelled cheque if you open the account online using your PAN
  • Aadhaar card if you open the account online using your Aadhaar

Tax benefits of NPS scheme

If you invest in the NPS scheme, you would be eligible for the following tax benefits –

Invest in elss funds
  • Investment into the scheme would be allowed as a deduction from your taxable income under Section 80CCD(1) up to 10% of your gross income subject to a maximum of Rs.1.5 lakhs
  • Additional investments, up to Rs.50, 000, would be allowed as a deduction under Section 80 CCD (1B)
  • Employer’s contribution, up to 10% of the basic salary + dearness allowance, would be tax-exempt under Section 80CCD (2)
  • Partial withdrawals would be tax-free
  • 60% of the corpus availed on maturity would be a tax-free income in your hands
  • Annuity payments received would be subject to taxation at your income tax slab rates

The NPS scheme, therefore, provides you with a tax-effective investment avenue to plan your retirement corpus. Regular investments and market-linked returns ensure that you build up a substantial corpus which can then give you guaranteed pensions in your golden years. Moreover, Punjab National Bank’s easy investment modes also help you invest without hassles. So, choose NPS investments for retirement planning and invest through Punjab National Bank for a smooth investment process.

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