South Indian Bank is a private sector bank in India, based out of Kerala. The bank was the first private sector bank to become a scheduled bank in 1946. The bank offers complete banking solutions to customers and also allows individuals to invest in the National Pension System (NPS) scheme.
What is the NPS scheme?
The NPS scheme is a retirement oriented investment scheme which was introduced by the Government of India in 2004-2005. Though launched in 2004-05, the scheme was made available to every individual from 1st May 2009. The NPS scheme allows you to invest over a long term period and accumulate a corpus for retirement. Moreover, after maturity, the scheme also pays pensions which help create a source of regular income in your golden years.
National Pension Scheme in South Indian Bank
As mentioned earlier, the South Indian Bank also offers the facility of NPS subscription for individuals. The salient features of the National Pension Scheme in South Indian Bank are as follows –
- The scheme is available in two models – All Citizens Model which is available for individual investors and Corporate Model which is available for corporates so that they can provide the NPS benefits to their employees
- There are two types of NPS accounts under both the models – Tier I and Tier II Account. The first account is mandatory and should be opened if subscribing to the NPS scheme. The second account, however, is optional and can be opened if you want to do additional investments into the NPS scheme
- Contributions to the scheme are done every year until 60 years of age. Thereafter, pension payments start
- There are two different investment strategies for investors with different investment styles. The first is the Active Choice strategy wherein the investor can manage his investments across different investment funds. The second is the Auto Choice strategy wherein the investments are managed for the investor in a pre-defined manner
- Mainly, there are three types of investment funds. These are Asset Class E, C and G and each fund has a different asset allocation
- The scheme offers market-linked returns which allow you to hedge against inflation and create a substantial retirement corpus
How to invest in South Indian Bank NPS?
To invest in the National Pension Scheme, South Indian Bank offers two alternatives. These are as follows –
- Investing through the bank’s branch
South Indian Bank has been authorized by the Pension Fund Regulatory and Development Authority (PFRDA) to offer the benefit of NPS subscription to its customers. The bank, therefore, allows you to invest in the NPS scheme offline. To subscribe to the NPS scheme offline, you should visit the designated South Indian Bank branch and apply for NPS. The bank has 873 branches and extension counters which serve as a Point of Presence Service Provider (POP-SP). Investing in South Indian Bank NPS scheme can be done through any of these branches and counters. You can find the address of these branches and counters at the link https://www.southindianbank.com/UserFiles/692%20designated%20branches.pdf.
To open the South Indian Bank NPS account, visit the nearest designated branch and avail the NPS registration form. Fill up the form stating all the details correctly and attach all the relevant documents. Submit the form and the documents to the branch office along with the amount of initial contribution to the NPS account and the applicable charges of opening the South Indian Bank NPS account. After verifying your details, the NPS account would be opened and the amount would be deposited in it.
- Investing online
South Indian Bank is a technologically advanced bank which allows customers the facility of online banking. Thus, you can open a South Indian Bank NPS account online through the bank’s website. To do so, the steps are as follows –
- Visit https://www.southindianbank.com/content/personal-banking/national-pension-system/521 and click on ‘Click here for Online NPS Registration’.
- You would be redirected to a new page wherein the requirements of opening the NPS account and the complete process would be mentioned
- Click on ‘Registration’ to proceed with the registration process
- Provide your details and upload your scanned documents
- Make the contribution towards the NPS account online and also pay the applicable registration charges levied by the bank
- Once your details are verified, the South Indian Bank NPS account would be opened by the bank at the earliest.
Documents required for opening the South Indian Bank NPS account
To open the account of National Pension Scheme, South Indian Bank requires you to submit some documents for KYC verification. These documents include the following –
- Age proof
- Address proof
- ID proof
For online registration, you should have a valid Email ID and phone number. You should also have an active bank account with one of the registered banks which allow online NPS contributions. Online registration can be done based on your Aadhaar or your PAN card. Scanned copy of your photograph would be needed for Aadhaar based registration. You would also have to submit a PAN Card and cancelled cheque for online registrations.
Eligibility to open a South Indian Bank NPS account
You can open a South Indian Bank NPS account if you fulfil the following eligibility parameters –
- You are aged between 18 and 60 years of age
- You are a resident Indian or an NRI
- You should comply with the KYC norms of the bank
- You need to contribute a minimum of Rs.500 to open a Tier I Account and a minimum of Rs.1000 to open a Tier II account
- In one financial year, you need to contribute at least Rs.6000 towards the Tier I account and Rs.250 in Tier II Account. Moreover, in Tier II Account, the minimum balance that should be maintained every financial year is Rs.2000
The NPS scheme is voluntary in nature and beneficial in creating a considerable retirement corpus for you. You also earn tax benefits on your investments under Section 80CCD (1) and 80CCD (1B) up to a maximum of Rs.2 lakhs. Moreover, on maturity, up to 60% of the corpus can be withdrawn as a tax-free income. These benefits make the scheme a beneficial retirement planning scheme and you can choose to invest in the National Pension Scheme in South Indian Bank through simple investment modes.