Post Office Saving Schemes: National Pension System (NPS) is a contributory system by which contributions from subscribers and allowance from respective governments as an employer, are collected in an individual pension account.
Post Office Saving Schemes: National Pension System (NPS) is a contributory system by which contributions from subscribers and allowance from respective governments as an employer, are collected in an individual pension account. The users are given an individual pension account recognised by Permanent Retirement Account Number (PRAN). This number is unique and can be transferred across locations and employment. The Pension Fund Regulatory and Development Authority (PFRDA) is identified as nodal authority to manage NPS operations.
Public Provident Fund (PPF) is a 15-year scheme, and the same can be extended within one year of maturity for indefinitely in multiples of five years. Interestingly, a subscriber is allowed to transfer a PPF account from a post office to a bank and vice versa. An individual of any age can open a PPF account, even those with an EPF account open one.
Both NPS and PPF can be opened at India Post and for more details one can visit its official website indiapost.gov.in.
Services offered by India post for NPS and PPF subscribers:
National Pension System (NPS): India Post offers subscribers to open new NPS (all citizens model) account and facilitates subsequent contributions, all types of service requests and exit/claim withdrawal requests. There are two types of accounts that are opened under NPS: Tier I and Tier II. Tier I is a pension account and is mandatory. Tier II is a savings account and is optional.
Public Provident Fund (PPF): The lock-in period for the Post Office PPF account is 15 years. Once enrolled, customers cannot close the PPF account before the lock-in period. From the commencement of the 7th year of the scheme, PPF account holders can make partial withdrawals up to 50% of the PPF savings in the account. When opening the PPF account, account holders can make nominations. The nominee will receive the deposits in case of untimely death of the account holder. Applicants cannot open joint accounts in the PPF scheme, according to India post.
Transactional Charges for NPS accounts:
|Registration Charges||Rs. 200 (excluding taxes).|
|0.25 % of the Contribution amount subject to minimum of Rs.20 (excluding taxes) and maximum of Rs.25,000 (excluding taxes).|
|All Service Charges||Rs.20 (excluding taxes).|
|Payment mode||>Cash, Cheque, DD subject to realization.|
Minimum Amount for opening of PPF account and maximum balance that can be retained:
An individual can open a PPF account with Rs. 100 but has to deposit minimum of Rs. 500 in a financial year and a maximum of Rs. 1,50,000. Deposits can be made in lump-sum or in 12 installments.
Income Tax benefits offered by NPS
There is an additional tax benefit up to Rs. 50,000 for investment in NPS (All Citizen Model), said India Post.
Interest rates on PPF:
From 1.01.2018, PPF deposits fetch an interest rate of 7.6 percent per annum (compounded yearly).