Union Bank of India is a public sector bank which is owned by the Government of India. The bank recently merged with Andhra Bank and Corporation Bank and now offers consolidated banking services to the customers of both these banks. Amidst the different banking services offered by Union Bank of India, the NPS scheme is also offered which can be subscribed to by new as well as existing customers of the bank. Let’s have a look at how –

What is the National Pension Scheme?

The Government launched the National Pension System (NPS) as a retirement scheme for its employees. The scheme was later opened for the general public as well. The NPS scheme helps individuals plan a retirement corpus through regular investments. Moreover, after retirement, the NPS scheme promises guaranteed pensions for the investor’s lifetime from the corpus created. The NPS scheme is, therefore, a retirement saving –cum – pension scheme that helps you build up a considerable retirement fund through market-linked returns.

Union Bank of India NPS

The Pension Fund Regulatory and Development Authority (PFRDA) has appointed Union Bank of India as one of the entities to act as a Point of Presence (POP) for NPS investments. Thus, you can invest in the NPS scheme in Union Bank of India.

For investment in the National Pension Scheme, Union Bank of India offers two investment modes. The first mode is the offline mode wherein you can invest in NPS through the branch of the bank. The second mode is the online mode wherein you can invest online. The process of investing under both the modes is described below –

  • Through the branch of the bank

All the branches of Union Bank of India act as POP Service Providers. You can, therefore, approach any of the nearest branches of the bank and open a UBI NPS account. To open the account, fill up the subscriber registration form available at the branch and the contribution slip providing all the necessary details. Then attach your KYC documents with the forms. Pay the bank charges and the contribution amount to apply for UBI NPS Account. After verifying your details, Union Bank of India would open an NPS account in your name.

  • Online 

Online investment facility is also allowed by the Union Bank of India. To invest online, click the link and choose ‘Apply Online’. Provide all the details required in the online registration form. Online registration of Union Bank of India NPS can be done either through your Aadhaar or your PAN Card. Choose the investment mode and provide the details of your Aadhaar or PAN Card. Scan and upload your KYC documents online. You would also be allowed to eSign the registration form to complete the application process. Pay the bank charges and the contribution amount online through digital payment modes and the registration formalities would be complete. Then Union Bank of India would verify your details and after verification, your online NPS account would be opened.

Eligibility criteria for opening a UBI NPS account

To subscribe to the NPS scheme in Union Bank of India, the following eligibility conditions should be fulfilled –

  • You should be a citizen of India. NRIs and OCIs are also allowed to subscribe to the NPS scheme
  • Your age should be between 18 and 65 years on the date of applying for the UBI NPS account
  • If you join after 60 years of age, you can continue investing in the Union Bank of India NPS account till 70 years of age

Why invest in the Union Bank of India NPS scheme?

The NPS scheme is beneficial for creating a retirement corpus. Here are some reasons why –

Invest in elss funds
  • Regular investments create a sizeable corpus

Once you open an NPS account, you would have to contribute regularly to keep your account active. At least one contribution is a must in a financial year under both Tiers I and II Accounts. These regular contributions help inculcate a habit of savings and also create a sizeable corpus for your retirement. Moreover, as the NPS scheme in Union Bank of India is an earmarked investment for retirement which does not allow easy withdrawals ensuring that your retirement corpus does not get eroded.

  • You get tax benefits

The investment that you do in the UBI NPS Account qualifies for a tax deduction. Investments up to Rs.1.5 lakhs are allowed as a deduction under Section 80CCD (1). Moreover, further investments, up to Rs.50, 000 can be claimed as a deduction under Section 80CCD (1B). If your employer also contributes to the NPS account on your behalf, you get a deduction under Section 80CCD (2) for up to 10% of your salary. On maturity, you can withdraw up to 60% of the corpus in a lump sum. This withdrawal is also a tax-free income giving you funds for your financial needs. Thus, the NPS scheme is a tax-effective scheme that helps you lower your tax liability both at the time of investments and also on maturity.

  • The investments are market-linked

Investments into the NPS scheme are allocated to equity and debt funds which, in turn, invest in the capital market for maximum returns. Thus, with market exposure, you get good returns on your investments which are also inflation-adjusted in nature. This inflation-adjusted market-linked return helps you accumulate a considerable corpus for retirement.

  • Different pension payment choices

After maturity, the NPS scheme pays guaranteed pensions for your entire life. There are different types of pension payment options available under the scheme and you can choose to avail pension under any option suiting your financial needs. You can also avail a joint life pension which pays pension for the life of your spouse in case of your premature demise. These pension payment options help you get the best incomes from your NPS corpus which also suits your financial requirements.

Given these benefits, you can invest in the NPS scheme in Union Bank of India and build up a retirement corpus for your golden years. Choose the online or offline mode of investment as per your suitability and invest in simple steps. Watch your investments grow and then, on maturity, avail lifelong incomes which supplement your finances in old age.

mutual fund investment