NPS Calculator

The National Pension Scheme calculator is a tool that enables an individual to compute the amount of money they will potentially receive as pension. All calculators only show an estimate of the potential pension and not an exact figure.

Who can use the NPS Calculator?

Individuals who are eligible to invest in NPS scheme can use the NPS calculator. According to the NPS rules, Indian citizens between the ages of 18 years and 60 years are eligible to invest in the scheme. However, individuals must submit the relevant Know Your Customer (KYC) documents in order to invest in the scheme.

Method to Use NPS Calculator

Given below are the details the NPS calculator will require:

  • Your current age and the age you want to retire must be entered.
  • The amount that you have invested towards NPS every month.
  • The returns that are expected by you from your investment.
  • The total number of years over which you would like to receive a pension after your retirement.
  • The percentage cannot be less than 40% if you wish to withdraw the money after you reach the age of 60 years and it cannot be less than 80% if you want to withdraw the money before you reach the age of 60 years.
  • After your retirement, the expected interest rate of the annuity investment is the amount that you will earn from your pension.

For more information, Check out related articles NPS Tier 1, NPS Tier 2 & PFRDA

NPS Calculator
NPS Calculator

How to use NPS calculator?

Calculators are found widely across the internet and certain banks even offer calculators of their own. These calculators offer close estimates and are very easy to use. This online tool is quite simple to use and can be used any number of times for free. Here is a step-by-step guide on how to use the NPS calculator:

  1. First, enter your current age or the age at which you start making contributions towards NPS.
  2. Then, input your retirement age which is usually 60 years.
  3. Depending on the age at which you begin NPS contribution, the total investing period will be automatically tabulated by the tool. For example, if your current age is entered as 35 and the retirement age is 60, then the total investing period will be 25 years.
  4. Enter your monthly contribution towards NPS, it can be as low as Rs.1,000.
  5. The interest earned is on monthly compounding basis. Enter the expected rate of interest or return on your NPS investment.
  6. Finally, you will get a summary of your NPS investment with details such as:
    • Principal amount
    • Interest earned
    • Pension wealth generated
    • Total tax saved
  7. To find out how much returns you will get from investing in annuity, input the percentage (%) of pension wealth to be invested in annuity and the rate of interest on annuity in the tool.
  8. You will get a summary of the lump sum amount withdrawn, pension amount invested, and pension per month post retirement.

What are the Details Shown by the NPS Calculator?

All your investment details are shown by the NPS calculator. The total amount earned at the time of maturity, the interest earned, and the total amount that has been invested by you are shown as well.

Details such as the amount invested by you to earn a monthly pension and the total amount that is withdrawn by you are also shown. According to the returns that you expect at annuity, the NPS calculator shows the monthly pension that you will receive.

Advantages of Using the NPS Calculator

The main advantages of using the NPS calculator are mentioned below:

  • Results are accurate when compared to manual calculations.
  • Future planning is possible since you will know the pension amount.
  • Saves time.
  • One-stop website to calculate the NPS amount.

FAQ’s On NPS Calculator

  1. How is Tier I different from Tier II?
  2. In case of Tier I, until the subscriber reaches the age of 60 years no withdrawal can be made, but for Tier II, withdrawal from his/her balance can be made anytime.

  3. For Tier I subscribers, what is the minimum contribution?
  4. The minimum contribution at one time is Rs.500 and Rs.1,000 per financial year.

  5. For Tier II subscribers what is the minimum contribution?
  6. The minimum contribution at one time is Rs.250. Minimum balance is not required.

  7. Is there any maximum contribution that must be made in a year?
  8. No, as of now there is no upper limit.

  9. Is there any transaction cost that is borne by the subscriber?
  10. Ad valorem of 0.25% of the total amount that is contributed. A maximum up to Rs.25,000 and a minimum of Rs.20 plus service tax.

  11. What happens to the accumulated corpus if the subscriber dies before the age of 60?
  12. The nominee or legal heir of the subscriber will get 100% of the accumulated corpus should the subscriber die before the age of 60, and there would not be any purchase of Monthly/Annuity Pension.

  13. Is there any limit to the number of nominations that can be made in an account?
  14. A total of 3 nominations can be made in an account.

  15. When the subscriber reaches the age of 60, can the entire amount be withdrawn?
  16. A maximum of 60% of the amount can be withdrawn when the subscriber reaches the age of 60. However, until the age of 70, the subscriber can remain invested. The remaining 40% will have to be annuitized at the end of the contribution year. There is also an option to annuitize 100% of the corpus.

  17. Is there any minimum number of contributions that should be made in a year?
  18. Yes, at least 1 contribution must be made in a year.

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