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  • IDBI New Pension System

    IDBI New Pension System gives its users options to invest based on their choice as well as risk affordability among three funds. The three funds under NPS are Equity (Asset Class E), Corporate Bonds (Asset Class C) and Government Securities (Asset Class G). The asset allocation switch can be made once in every year. There is also the flexibility to choose between the Active and the Auto Choice for distribution options.

    Eligibility Criteria for IDBI New Pension System

    The following are the eligibility criteria for IDBI Bank New Pension System:

    • The applicant should be an Indian citizen or NRI.
    • The applicant should be a minimum of 18 years and maximum of 60 years
    • He or she should have all the following documentation ready:
      • To open this account, the individual should be between the age of 18 to 60 years.
        • Photo Id proof
        • Date of birth proof
        • Address proof
        • Application form
    • In case of Tier I:
      • Minimum contribution for account opening is Rs.500
      • Minimum amount payable for every contribution is Rs. 500
      • Minimum Required Account Balance at the end of every financial year is Rs. 6,000
      • Minimum number of contributions per annum should be at least once.
    • In case of Tier II:
      • Minimum contribution for account opening is Rs. 1,000
      • Minimum amount payable for every contribution is Rs. 250
      • Minimum Required Account Balance at the end of every financial year is Rs. 2,000
      • Minimum number of contributions per annum should be at least once.
      • For a Tier II account opening, the individual has to first open an active Tier I account for activating the Tir II account.
      • Minimum contribution at the time of account opening is Rs. 1500 when a composite application is being made for Tier I and Tier II together.
      • Submission of a cancelled cheque is required for composite application or Tier II or Composite application with the application form.

    Features of The IDBI National Pension Scheme

    NPS offers exquisite features to individuals, allowing people to avail an opportunity that is an unique investment to save. Some salient features of IDBI Bank New Pension System:

    • Once you create an account, (PRAN) it remains the same allowing you no hassles when changing jobs or location.
    • You can also switch between the fund managers. For instance, if you are with IDBI Bank New Pension System, you can change it an NPS of a different bank that offers a different fund management system.
    • The subscriber has access to the NPS account online, as he or she is given a unique username and password.
    • Amount and frequency of contribution is highly flexible.
    • Prudently regulated - NPS is regulated by PFRDA, with transparent investment norms and regular monitoring and performance review of fund managers by NPS Trust
    • You can log onto the CRA / PFRDA Website and contact Call Center, Email or snail mail for help.
    • The maximum investment in equity can be upto 50%.
    • The PRAN account number remains the same, throughout the individual’s life.
    • There are 2 types of accounts available based on withdrawal from the scheme:
      1. Tier I
        • This is a non-withdrawable account and unless the individual reaches the age of 60 years, they cannot withdraw the pension for the rest of the years.
        • The subscriber has to close the scheme he or she reaches 60 years of age.
        • However the individual can extend the scheme for 10 years, further under the condition that no new contributions can be made on the scheme. Also it is mandatory to annuitize 40% of the accumulated pension wealth. The option to annuitize 100% of the whole corpus is allowed as well.
      2. Tier II
        • A Tier-II account is an optional voluntary savings account, where the subscriber is free to withdraw from the accumulated scheme amount any time. Subscribers can use NPS calculator to get an estimate of your scheme amount.
        • The facility is available to Indian citizens of India which includes Government employees who are mandatorily covered by NPS.
        • There are also no restrictions on the number of withdrawals that can be made in Tier II.
        • The individual can also separate nomination as well as scheme preference between Tier I and Tier II.
        • One-way transfer of savings between tiers is allowed.
        • There is no requirement for another KYC for Tier II account opening since a pre-existing Tier I IRA Compliant account would already to active.
    • There is portability for NPS across industries and locations allowing a hassle-free arrangement for individuals.
    • The whole scheme is regulated by the PFRDA, ensuring transparency in the investments, monitoring regularly and a performance review of all the fund managers by NPS Trust.
    • The following tax benefits are applicable on the IDBI National Pension Scheme:
      • For Salaried individual: Tax deduction possible for 10% of Salary (Basic + Dearness Allowance), under section 80CCD (1) of Income Tax Act, 1961 with a maximum of Rs.1.5 lakhs limit under section 80CCE.
      • For Self-employed Individual: Tax deduction possible for 10% of Salary (Basic + Dearness Allowance), under section 80CCD (1) of Income Tax Act, 1961 with a maximum of Rs.1.5 lakhs limit under section 80CCE.
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