Top 10 Benefits of NPS Investment

National Pension Scheme is an investment option for the employees from the government of India which has several benefits including tax saving. Under this, the employee could save a lot for his or her old age and reap the juice. The further benefit is, the govt. employee gets the complete liberty to choose the option for further investment of his money in different new schemes of the government. In this, the employees also get the opportunity to get a small part of their investment withdrawn from their accounts.

Under this scheme, the employees get two types of accounts, such as tier-I and tier-II. The tier-I is a fundamental retirement pension account available for all the pensioners. The tier-II account is another prospective payment system account with the provision that the employees could withdraw a small portion of under exceptional situations. This is permissible when the employee suffers from illness.

Top 10 NPS Benefits

Here I prepared the list of top 10 benefits of NPS Scheme when you invest it wisely;

Wide investment opportunities– Under this, the employee gets three options for investment in three types of assets.  Under the three types of available assets, such as equity options, government securities, and arrange of fixed deposit options.

Tax saving Device- The fund created for the purpose of pension comes under the regulation and control of Pension Fund regulatory and development authority (PFRDA). Tax benefits are available under Section 80CCD (1) and Section 80CCD (2). Under this, the employee could save up to 1 lakh.

Retirement friendly option– Besides being a tax-saving option, it is also helpful as a retirement friendly option. This assures the investors of a happy and tension free retirement friendly option.

Wide coverage of employees–  Under this, not only the state and Central government employees are eligible but employees of registered companies, proprietorship organizations, societies, and trusts could take the benefits under this scheme.

Option for Choosing Fund Managers– The employee could choose one from the three Fund Managers. As of now, LIC Pension Fund, SBI Pension Fund, and UTI retirement solutions are available as options for management of investment funds by the government.

Tax Benefit for the Employers– The employer could state the employees’ pension as an expense in its business and get benefits in tax for the total amount contributed for the same.

Compounding Investment- Under this, the principal of the amounts gets compounded with the interest. As the sum in the investment gets increasing with the investment every month, this is one of the most attractive investment options so far.

Great portable Investment– When the employee gets shifted to any other organization, it does not affect operation of the NPS account. As under this, the employee gets a permanent retirement account, which is portable. In case of transfer or shifting to any other organization, the whole amount simply gets transferred.

Day-to-day information– Under this scheme, the employee could get complete information about the status of his investment on every day basis.

Simplicity in operations– Opening and operating NPS account do not involve any complications. As an employee, the account-holder just requires the permission from his nodal office and then obtains PRAN number. The NPS is popular because of simplicity in operations of the account.