The best pension scheme for retirement planning that is shaped to enable a systematic savings during the subscribers working life.

  • Introduction
  • Benefits
  • Tax Benefits
  • Who Can Subscribe?
  • Account Opening

National Pension Scheme : Introduction

  • The Government of India (GOI) rolled out the NPS scheme for all citizens of India from May 1, 2009, and corporate sector from December 2011.
  • The person (employee/citizen) who joins the NPS scheme is a "subscriber". Under the NPS, each subscriber opens an account with the Central Recordkeeping Agency (CRA), which is identified through a unique Permanent Retirement Account Number (PRAN).
  • Under the scheme, two types of NPS accounts are available to subscribers- Tier I & Tier II. The Tier I NPS account is meant for subscribers to contribute their savings for retirement into a non-withdrawable account. These savings can include an employer’s contribution to NPS, in case of the corporate sector
  • The Tier II NPS account is a voluntary savings account from which subscribers are free to withdraw their savings whenever they wish. The facility of Tier II account was made available from December 1, 2009, to all citizens of India including government employees and corporate sector subscribers who are not mandatorily covered under the NPS. An active Tier I account is a pre-requisite for opening a Tier II NPS account.
  • The National Pension System, commonly referred to as NPS, is a voluntary, contribution retirement savings scheme and that has been designed to enable systematic savings during the subscriber's working life.
  • Bank of Baroda is registered with PFRDA (Pension Fund Regulatory and Development Authority) as POP (Point of Presence) for NPS under All Citizen Scheme and as an aggregator for the purpose of processing NPS Accounts (Tier-I and Tier-II) as well as acceptance of contributions.
  • Those who wish to register under the NPS scheme can visit our branch with identity proof, address proof and age proof and fill the required form. All branches of Bank of Baroda can facilitate the NPS account opening

National Pension Scheme : Benefits

Opening an NPS account offers several advantages to subscribers. Some of the benefits of the NPS account are mentioned below:

  • NPS is voluntary - NPS scheme is open to every Indian citizen. As an NPS account subscriber, you can choose the amount of contribution to the NPS scheme every year.
  • NPS is simple - NPS account opening is an easy process. You only need to open an account with our bank and get a PRAN for the NPS scheme.
  • NPS is flexible - As a pension system, the NPS lets you choose your own NPS investment option and fund scheme. This NPS account feature helps you grow your money as per your financial goals.
  • NPS is portable - You can operate your NPS account from anywhere in the country, even if you change your city, job or pension fund manager.
  • NPS is regulated - The NPS scheme is regulated by the development authority PFRDA, with transparent investment norms, regular monitoring and a performance review of fund managers by the NPS Trust.

National Pension Scheme : Tax Benefits

NPS Scheme Tax Benefits for Individuals

Any individual who is a subscriber of the NPS can claim a tax deduction up to 10% of the gross income under Section 80CCD (1) within the overall ceiling of Rs.1.5 lakh, under section 80CCE.

NPS Scheme Tax Benefits for Corporate Subscribers

An additional NPS tax benefit is available to subscribers from the corporate sector under section 80CCD (2) of Income Tax Act. The employer’s NPS contribution (towards the employee) up to 10% of salary (Basic + DA), without any monetary limit, is deductible from the taxable income.

Exclusive NPS Tax Benefits for subscribers u/s 80CCD(1B)

An additional deduction for the NPS investment up to Rs.50,000 (Tier I account) is exclusively available for the NPS scheme under subsection 80CCD (1B). This is over and above the deduction of Rs.1.5 lakhs available under section 80C of the Income Tax Act,1961.

National Pension Scheme : Who Can Subscribe?

  • Any Indian citizen, whether resident or non-resident/Overseas Citizen of India (OCI), can apply for an NPS account opening. However, those who apply to the NPS scheme must be between 18 to 70 years of age as on the submission date of his/her application to the bank’s branch.
  • The maximum age up to which an NPS account can be continued is up to 75 years.
  • Citizens can join the NPS scheme either as employee-employer group(s) (corporates) or individuals, subject to submission of all the required information and know your customer (KYC) documentation.

National Pension Scheme : Account Opening

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Frequently Asked Questions (FAQs)

  • What is Kisan Vikas Patra Scheme?

    Kisan Vikas Patra, an initiative of the Indian government, is a small savings instrument that allows people to invest in a long-term savings plan. An individual can open an unlimited number of KVP accounts with a minimum deposit of one thousand rupees and any amount in multiples of one hundred rupees. There is no maximum deposit limit in an account or in accounts held by an account holder.

  • Is Kisan Vikas Patra a good investment?

    Yes, Kisan Vikas Patra is a good investment for chances of less to no risk.

  • Who is eligible for Kisan Vikas Patra?

    Kisan Vikas Patra can be purchased by any Indian resident and minors.

  • What is the interest rate on Kisan Vikas Patra?

    For Q3 ROI is 7.0%. The interest rates of kisan vikas patra savings schemes are decided by the government and vary every 3 months to a year.

  • Which documents required for Kisan Vikas Patra scheme?

    Documents required for Kisan Vikas Patra are Aadhaar Card, Driving Licence, Passport, Voter ID as identity & address proofs.

    Note: PAN card for investments over Rs.50, 000 and income source proof for investments exceeding Rs.10,00,000 is mandatory.

  • How Kisan Vikas Patra works?

    Kisan Vikas Patra is a risk-free investment to get promised returns on fixed interest rates throughout the year.

  • Can I withdraw KVP after 2.5 years?

    Yes, one can withdraw Kisan Vikas Patra (KVP) after 2.5 years.

  • Can I transfer a KVP certificate to another person?

    Yes, that is an option and you can transfer a KVP certificate to another person.

  • What is the maturity period of Kisan Vikas Patra (KVP)?

    The maturity period of KVP is 123 months.
    Note: Presently maturity period depends upon ROI.

  • Are there any restrictions in terms of the amount that can be invested in Kisan Vikas Patra?

    No, there is no maximum limit for deposit in an account or in accounts held by an account holder.

  • What is the current rate of interest that can be earned with KVP scheme?

    The current rate of interest with KVP scheme is 7.0% for Q3.

  • Where can one encash a Kisan Vikas Patra (KVP)?

    One can encash a KVP through a branch.

  • How will the KVP maturity amount be paid?

    The KVP maturity amount be paid will be credited in operative account of customer.

  • Can NRIs and HUFs invest in the KVP scheme?

    No, NRIs and HUFs cannot invest in the KVP scheme.

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