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Procedure: Open a New Pension Scheme (NPS) Account
February 06 , 2013
  1. The NPS is a phenomenally useful instrument to help you save for retirement. It is the lowest cost, best managed vehicle
  2. NPS allows your retirement account to benefit from the long term superiority of equity returns
  3. Currently, the NPS is taxed on withdrawal, but this might go soon 
  1. Any Indian citizen aged between 18 and 55 can open an account
  2. The points of presence for opening and servicing accounts include: SBI and its associates, ICICI, Axis, Kotak Mahindra, Allahabad Bank, Citibank, IDBI, Oriental Bank of Commerce, South Indian Bank, Union Bank of India, LIC, IL&FS, UTI Asset Management and Reliance Capital
  3. Walk over to the nearest point of service with your identity and address proof, fill the form and open your account. Your account is unique and can be transferred in case you have a change of location later
  4. You can choose between debt, hybrid and equity allocations. You can also leave this option blank, in which case the default Auto Lifecycle Fund is chosen
  1. Make sure you invest atleast Rs 6,000 annually, to keep the account active. This has to be done atleast once a quarter
  2. There is little flexibility to withdraw before you turn 60. But this is a good thing, since it forces you to save for retirement without getting distracted with shorter-term concerns
  1. The corpus gets accumulated till you turn 60. Thereafter, you can choose to withdraw upto 60% of the amount. The rest becomes an annuity for your lifetime

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