UCO Bank is a public sector bank owned and managed by the Government of India. The bank was formed in the year 1943 and today the bank operates through more than 3000 service units across India. UCO Bank offers different types of deposit accounts, loans, NRI services, investment services and other banking services to its customers. The National Pension System (NPS) which was launched by the Government is also available through UCO Bank.
What is the National Pension System?
The NPS scheme is a retirement oriented, defined contribution pension scheme. It allows you to invest regularly over a long term period and then avail pension payments after maturity. The NPS scheme is a market-linked scheme which offers inflation-adjusted returns on your investments thereby ensuring that you can accumulate a considerable corpus for your retired life. The NPS scheme is also favoured among investors because of its tax-saving benefits which help investors reduce their taxable income while at the same time building up a retirement corpus.
Features of UCO NPS
Here are the salient features of NPS scheme in UCO Bank which you should know before you invest in the scheme –
- This is a regular investment scheme wherein you should invest at least once every financial year
- There are two types of investment accounts – Tier I and Tier II. A Tier I account is mandatory and offers you tax benefits on your investments. Tier II Account is optional and allows flexible withdrawals whenever you want
- There are two types of investment preferences – Active and Auto Choice. The underactive Choice mode you can pick your investment funds while under the Auto Choice mode your investments would be managed in an automated manner depending on the risk profile that you choose
- There are different pension fund managers for managing your NPS investments and the choice of the fund manager is in your hands
- The NPS scheme offers you both equity and debt funds to invest your money
- You can withdraw from Tier I Account for important financial needs from the third year. Such withdrawals are allowed for a maximum limit of 25% of the fund value
- On maturity, you can commute up to 60% of the accumulated funds and receive pensions from the remainder. There are different companies for the payment of pension and you can choose a company which offers the best pension rates
- There are different types of pension payment modes. You can choose to receive a pension only on your life and also include your spouse to receive the pensions in case of your premature demise
- Whichever investment fund that you choose, as your age advances, your equity exposure is reduced to protect the returns against volatility risk
How to invest in UCO NPS account?
To subscribe to the National Pension Scheme, UCO Bank allows you the offline mode of investment. UCO Bank has 1851 branches that act as Point of Presence Service Providers across India. The list of these branches can be found through the link https://www.ucobank.com/pdf/NPS-Branches.pdf. To apply for NPS in UCO Bank, here are the steps which you should follow –
- Visit the nearest branch of the bank which acts as POP-SP
- Get the subscriber registration form which is available at the branch. Alternatively, you can download the form yourself through the link https://www.ucobank.com/pdf/C-023-15-D9_NeGIL-CRA-NPS_Form_1_11th-proof.pdf
- Fill up the form completely stating all the relevant details
- Attach your passport-sized photograph on the form
- Get the NPS subscription slip from the branch and fill it up stating the details of the amount that you are contributing towards the opening of the NPS account
- Attach your KYC documents with the registration form. The documents include your photo identity proof, age proof and address proof
- Pay the bank charges for NPS registration and contribution to the scheme
This completes your application process. The bank would verify the details and then, after successful verification, would open your NPS account. You would also be given a Permanent Retirement Account Number (PRAN) which would be a unique NPS account number which you can choose to invest subsequently and track your investments.
How do your UCO NPS investments work?
Once you subscribe to the NPS scheme in UCO Bank and open a Tier I Account, you would have to make the following choices –
- The investment strategy –
- Active Strategy – choose to invest in a combination of the available funds
- Auto Strategy – choose the risk profile and your money would be allocated automatically
- The pension fund manager – You can choose any one of the following pension fund managers who are authorized by the PFRDA
LIC Pension Fund
- ICICI Prudential Pension Fund
- Reliance Capital Pension Fund
- DSP Blackrock Pension Fund Managers
- SBI Pension Fund
- UTI Retirement Solutions Pension Fund
- Kotak Mahindra Pension Fund
- HDFC Pension Management Company
Thereafter, your investments would grow according to the market performance and the growth in the value of the underlying assets of the funds which you have selected. You can switch from Active Choice to Auto Choice and vice-versa. You can also change your pension fund manager during the investment tenure if you want. Moreover, if you have chosen the Active Choice strategy and have selected the investment funds yourself, you can switch your investments between the selected funds as per your preference.
UCO NPS tax benefits
The NPS scheme is a tax-efficient saving scheme which offers you tax benefits under the following heads –
- The investments that you make towards Tier I Account would be allowed as a deduction under Section 80CCD (1) up to a maximum of Rs.1.5 lakhs
- Additional investment to the Tier I Account can be claimed as an additional deduction under Section 80CCD (1B) up to a maximum of Rs.50, 000
- If Government employees contribute towards the Tier II Account with a lock-in period of 3 years, they can claim a deduction on their investments under Section 80C up to Rs.1.5 lakhs
- Your employer’s contributions would be treated as a deduction in your hands under Section 80CCD (2)
- On maturity, if you commute the corpus, the lump sum amount availed would be treated as a tax-free income in your hands
The NPS scheme is, therefore, a good retirement oriented saving scheme which not only promises attractive returns but also has tax-saving benefits. UCO Bank offers the NPS scheme and you can invest in the scheme through the bank’s branches in simple steps.