Top Banks in the National Pension System

The National Pension Scheme/New Pension Scheme is the top choice for a retirement planning solution. The variety of investment options offered coupled with low maintenance/transaction charges and high rates of interest make this a firm favorite for anyone who is looking for a top quality savings scheme in India.

To subscribe to the NPS, you can fill and submit an application online or visit one of the Points of Purpose (POP). Points of Purpose are banks that have been authorized by the PFRDA to help citizens open and maintain pension accounts. We’re now going to take a look at the top banks in the National Pension System. The list includes both private and nationalized banks.

1.  HDFC NPS – HDFC National Pension System

The HDFC National Pension System lets you subscribe to a NPS account. By subscribing, you are given the option to invest in any three types of assets i.e Equity, Corporate Bonds, and Government Securities. You can switch the type of asset you want to invest in once a year, and can set limits on the value of your funds you want invested (Max 50%).

a)   HDFC NPS – Eligibility Criteria

To subscribe to the HDFC retirement plan in accordance with the NPS, you need to meet the following criteria:

  • Be between the ages of 18-60
  • Provide necessary documentation: Photo I.D, Proof of Address, Date of Birth proof, Completed Application Form
  • INR 500 contribution for opening a Tier I account and maintain a yearly closing balance of INR 6000 (minimum)
  • Minimum contribution value to a HDFC NPS Tier I account is INR 500 and you will need to make a contribution at least once a year
  • To open a HDFC NPS Tier 2 Account you will need to contribute INR 1000 at the time of account opening
  • INR 250 is the minimum contribution amount to a HDFC NPS Tier 2 Account and you need to make at least one contribution a year
  • INR 2000 or more should be your Tier 2 account year end closing balance
  • INR 1500 to be paid when opening a composite Tier 1 + Tier 2 account
  • A canceled cheque is to be submitted along with your application form

b)   HDFC NPS – Features

Some of the top features of the HDFC pension scheme are:

  • You will be given a PRAN upon account creation. This remains the same letting you change job or location with zero hassles
  • Know how much pension amount you can get using the HDFC Pension Calculator
  • You can easily move to the pension scheme of another bank from the HDFC National Pension Scheme. This way you can get access to different fund managers.
  • Access your NPS account online by using the unique username and password given to you in your welcome kit
  • Centrally regulated by the PFRDA and regulatory guidelines. Thus, making your investment risk free.
  • Effective customer support from HDFC as well as the CRA/PFRDA. In addition, you can log onto the CRA/PFRDA website for any help.
  • 50% cap on investment in equity
  • Typical NPS Tier 1 Account and NPS Tier 2 Account features
  • Easily transfer savings from Tier 2 to Tier 1

c)   HDFC NPS – Benefits

The biggest benefit of the HDFC National Pension Scheme are the tax exemptions that are attached to subscribing to a HDFC NPS account.

  • Salaried and self-employed individuals can get a tax deduction of up to 10% of their salary (Basic + D.A), as per section 80CCD of the Income Tax Act, 1961. A maximum deduction of INR 1.5 Lakhs is allowed.

d)   How to open account in HDFC?

  • Offline – Head to your nearest authorized HDFC POP and ask for NPS application form or an NPS composite application form. Fill in all details and provide necessary documentation.
  • Online – Click on this link (https://leads.hdfcbank.com/applications/webforms/apply/HDFC_NPS/NPS_DisclaimerPage.aspx). Fill out the online form, complete e-KYC, upload necessary documents and pay the account opening charges. Your HDFC PRAN will be generated and sent to you.

2.  ICICI NPS – ICICI Bank National Pension System

The ICICI National Pension System has been set in place to help its bank users as well as other citizens to subscribe to the National Pension Scheme. Before we get to know more about the features, benefits, and other details of an ICICI NPS account, let us learn the key eligibility criteria.

a)   ICICI NPS – Eligibility Criteria

To subscribe to the ICICI pension plan, the following criteria have to be met:

  • Be an Indian Citizen or NRI between the ages of 18-60
  • Possess necessary documents:

Photo I.D

Date of Birth proof

Address proof

Canceled Cheque

Completed Application Form

  • INR 500 contribution for opening a Tier I account and maintain a yearly closing balance of INR 6000 (minimum)
  • Minimum contribution value to a ICICI NPS Tier I account is INR 500 and you will need to make a contribution at least once a year
  • To open a ICICI NPS Tier 2 Account you will need to contribute INR 1000 at the time of account opening
  • INR 250 is the minimum contribution amount to a ICICI NPS Tier 2 Account and you need to make at least one contribution a year
  • INR 2000 or more should be your Tier 2 account year end closing balance
  • INR 1500 to be paid when opening a composite Tier 1 + Tier 2 account

b)   ICICI NPS – Features

  • Unique PRAN (Permanent Retirement Account Number) is generated and given to you at the time of account opening. Number remains constant through your lifetime.
  • Option to choose the value of your funds you want to invest (Max 50%)
  • Choice of 8 top investment fund managers. You may switch to another investment manager at will. Here are your 8 options:
  • ICICI Prudential Pension Fund Management Co. Ltd.
  • HDFC Pension Management Co. Ltd.
  • Kotak Mahindra Pension Fund Ltd.
  • LIC Pension Fund Ltd.
  • Reliance Capital Pension Fund Ltd.
  • SBI Pension Funds Pvt. Ltd
  • UTI Retirement Solutions Ltd
  • Pension Fund (PF) to be incorporated by Birla Sunlife Insurance Co. Ltd One Fund Manager must compulsorily be selected
  • Accounts are easily portable and transferable throughout the country
  • Know your pension amount by using the NPS Calculator ICICI tool
  • Online access to your ICICI NPS account
  • Typical NPS Tier 1 Account and NPS Tier 2 Account features
  • Open NPS account online on ICICI – Available to all ICICI account holders

c)   ICICI NPS – Tax Benefits

The biggest benefit of the ICICI Pension Plan are the tax exemptions that are attached to subscribing to a ICICI NPS account.

  • Salaried and self-employed individuals can get a tax deduction of up to 10% of their salary (Basic + D.A), as per section 80CCD of the Income Tax Act, 1961. A maximum deduction of INR 1.5 Lakhs is allowed.

3.  NPS SBI – National Pension Scheme SBI

The New Pension Scheme a.k.a the National Pension Scheme was made open to all citizens of India and NRI’s in 2009. The scheme aims at encouraging individuals to start saving for a post-employment future while they are still employed. The SBI Pension Scheme is one of the top saving/investment choices in the country.

a)   NPS SBI – Eligibility Criteria

To open a SBI pension account under the SBI pension scheme, you will have to meet the following criteria:

  • Be between the ages of 18-60
  • Provide necessary documentation: Photo I.D, Proof of Address, Date of Birth proof, Completed Application Form
  • INR 500 contribution for opening a Tier I account and maintain a yearly closing balance of INR 6000 (minimum)
  • Minimum contribution value to a Tier I account is INR 500
  • To open a SBI NPS Tier 2 Account you will need to contribute INR 1000 at the time of account opening
  • INR 250 is the minimum amount to be contributed to a Tier 2 Account
  • >INR 2000 year end closing balance (Tier 2 account)
  • INR 1500 to be paid when opening a composite account (Tier 1 + Tier 2)

b)   NPS SBI – Features

  • Upon opening a Tier 1 account you will receive a PRAN that remains with you for the rest of your life. This makes portability and moving to another state easy.
  • SBI Pension Scheme Tier-1 Accounts are non-withdrawal accounts
  • SBI Pension Scheme Tier-2 Accounts can only be created by Tier-1 Account holders
  • Tier-2 Accounts have no withdrawal limits. They can be operated like a normal savings account
  • Know what your pension amount will be. Use the NPS Calculator SBI
  • You can move at will to another investment fund manager if you aren’t happy with your rate of returns.
  • Select how much you want to invest (max 50%)

c)   How to open NPS account in SBI?

  • You can apply for a NPS account online by visiting onlinesbi.com and clicking on NPS registration
  • Visit the nearest SBI branch, collect, fill, and submit the application form along with necessary documents

4.  NPS AXIS BANK – Axis Bank National Pension System

The Axis bank pension plan was announced by the Government of India to help citizens secure their retirement future. It ensures a steady flow of income every month once they’re old/retired (Post 60 years of age).

This scheme has two models: The All Citizens Model and the Corporate Sector Model.

a)   NPS Axis Bank – Eligibility Criteria

All Citizens Model

  • Be a citizen of India or a NRI between the age of 18-60
  • Necessary Documentation: Photo I.D proof, Address Proof, Date of Birth proof, Complete application form, Canceled Cheque
  • Government employees are required to participate in this scheme (mandatory)

Corporate Model

  • To enroll to the corporate division of the Axis bank pension plan, the company is required to file a MOU.
  • All employees of the company are enrolled into the scheme.
  • Employees should produce the documents as described by the All Citizens Model

b)   NPS Axis Bank – Features

All Citizens Model

  • Active or Auto Choice investment option. Active choice lets you choose between 6 different investment options.
  • Tax Benefits under section 80CCD of Income Tax Act, 1961
  • Withdrawals are taxable
  • Maximum Contribution/Annum is INR 1 lakh
  • Subscriber can nominate up to 3 individuals for this account
  • To exit before 60 years, you will have to use 80% of the amount to purchase annuity and receive the remaining 20% as a lump sum
  • Citizens from the unorganized sector can enroll under the Swavalambam scheme

Corporate Model

  • Employer can make a contribution to an employee’s Axis bank pension plan account
  • Employer can avail tax benefits on these contributions
  • Account can be transferred from one company to another easily
  • Employee contributions are also eligible for tax benefits

5.  KOTAK NPS – Kotak Mahindra Bank New Pension System

The National Pension Scheme, regulated by the Pension Fund Regulatory and Development Authority (PRFDA), is an investment based post-retirement savings solution offered by the Government of India.

Under the Kotak Mahindra Bank New Pension System, you can enroll/subscribe to the National Pension Scheme. Kotak Mahindra Bank is renowned as one of the premier NPS providers due to their excellent, highly-qualified fund managers.

a)   Kotak NPS – Eligibility Criteria

The Kotak NPS scheme can be subscribed by meeting the following criteria:

  • Be a resident Indian or a NRI
  • Between the age of 18-60
  • Provide documents that meet necessary KYC (Know your customer) terms
  • Meet the minimum contribution criteria for maintaining a Tier 1 account
  • Hold a Tier 1 account in order to open a Tier 2 account
  • Fill out a composite form to open both Tier 1 and Tier 2 accounts at the same time
  • Provide a canceled cheque with you application form

b)   KOTAK NPS – Features & Benefits

As mentioned before, the Kotak Mahindra Pension Fund is renowned for its fund management system. In addition, it also comes with a whole host of features and benefits.

  • PRAN (Permanent Retirement Account Number) once application has been approved and an account opened.
  • PRAN is completely portable and is constant.
  • Use the Kotak NPS Calculator to know your pension amount
  • The Kotak NPS Calculator is a free-to-use online tool to help you make an informed choice before opening the account
  • Complete freedom over the investment choices you make with your pension fund amount
  • You can invest up to a maximum of 50%
  • You can avail tax benefits on your Kotak NPS account contributions as per Section 80CCD of the INCOME TAX ACT, 1961