National Pension System (NPS): Secure your retirement
Build a retirement corpus with disciplined investing, tax benefits, and flexible pension planning through the National Pension System.
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National Pension System: Secure Your Retirement Journey
Plan your retirement with NPS and start building the corpus that gives you financial independence in the years ahead. Open your National Pension System (NPS) account online, let your contributions grow through market-linked returns and claim attractive tax benefits along the way. It is retirement planning made simple, a fast digital experience that puts you in control from day one.
How does NPS work?
NPS follows a simple investment process:
Open & Get PRAN
Open an NPS account and receive a Permanent Retirement Account Number (PRAN).
Contribute
Contribute at your preferred frequency, subject to minimum contribution rules.
Professionally Invested
Your money is invested by professional Pension Fund Managers (PFMs).
Grow Over Time
The investments grow over time based on market performance.
Withdraw & Annuity
At retirement, withdraw the eligible lump-sum amount, while the remaining corpus generates regular pension income through an annuity.
Who can use NPS - individuals or corporate employees?
NPS is available to both individual investors and employees enrolled through an employer-sponsored Corporate NPS plan.
For Individual Subscribers
- Suitable for salaried and self-employed individuals
- Flexible contribution amounts
- Choice of investment options and pension fund managers
- Tax-saving opportunities under applicable Income Tax provisions.
For Corporate Employees
- Employers may offer Corporate NPS as part of employee retirement benefits.
- Employees continue to enjoy portability even when changing jobs.
- Employer contributions may offer additional tax advantages as per prevailing tax laws.
Whether you invest independently or through your employer, NPS provides a disciplined framework for building long-term retirement wealth.
What are the Key Features & Benefits of NPS?
Some of the key features and benefits of NPS include:
Features & Benefits
Description
Government-regulated retirement savings framework
NPS is regulated by the Pension Fund Regulatory and Development Authority (PFRDA), ensuring transparency, security, and investor protection.
Professionally managed investment portfolio
Your NPS contributions are managed by experienced Pension Fund Managers who invest across diversified asset classes.
Choice of Pension Fund Managers
You can choose from multiple registered Pension Fund Managers and switch between them as per applicable guidelines.
Flexible contribution amounts
Contribute at your own pace by investing amounts that suit your financial goals, subject to the minimum contribution requirements.
Market-linked wealth creation potential
Your retirement savings have the opportunity to grow over time through investments linked to the performance of financial markets.
Low fund management charges
NPS offers one of the lowest fund management costs among retirement investment products, helping maximise your long-term savings.
Portable account across employers and locations
Your NPS account and PRAN remain the same even if you change jobs, cities, or employers, ensuring uninterrupted retirement planning.
Attractive tax benefits under the Income Tax Act
Eligible subscribers can avail tax deductions on NPS contributions under the applicable provisions of the Income Tax Act.
Online account management and contribution facility
Easily manage your NPS account, make contributions, and track your investments through convenient online platforms.
Suitable for long-term retirement planning
With disciplined investing and the power of compounding, NPS helps you build a retirement corpus for long-term financial security.
These features make NPS an effective option for individuals looking to build a retirement corpus while maintaining flexibility throughout their working years.
Types of NPS Accounts
NPS offers two types of accounts: Tier I (the core retirement account) and Tier II (a flexible no-lock-in savings account).
Tier I Account - The Primary Retirement Account
Tier I is the core NPS account designed for long-term retirement savings. It is a restricted and conditionally withdrawable retirement account that can be withdrawn only upon meeting the exit conditions prescribed under NPS. It offers all major NPS tax benefits and has withdrawal restrictions to help build a dedicated retirement corpus. A minimum annual contribution is required to keep the account active. Equity and related instruments can constitute up to 75% in the Tier I account.
Tier II Account - The Flexible Savings Account
This optional account is available only to existing Tier I subscribers and is a voluntary savings facility available as an add-on to any Tier I account holder. It offers complete flexibility with no lock-in period, allowing subscribers to make contributions and withdraw their savings whenever they wish, making it suitable for short- to medium-term investment goals. Tier II account does not have any tax benefits. Equity and related instruments can constitute up to 100% in the Tier II account.
Types of Applicants
Applicants refer to the category of subscribers applying for the NPS account. There are 5 types of applicants:
Individual Subscriber
Any Indian citizen aged 18–70 can open an NPS account to build a retirement corpus with flexible contributions and long-term tax benefits.
Corporate Subscriber
Employers can contribute to employees' NPS accounts, unlocking additional tax benefits for both - a smart, low-effort retirement solution for the modern workplace.
Non-Resident Indian (NRI) Subscriber
Eligible NRIs can open an NPS account online and build a retirement corpus in India, subject to applicable RBI and FEMA regulations.
Overseas Citizen of India (OCI) Subscriber
Overseas Citizens of India can also invest in NPS to secure their retirement in India, enjoying the same benefits as resident subscribers.
NPS Vatsalya (Minor) Subscriber
Parents or guardians can start an NPS account for their child early, letting long-term compounding build a strong retirement corpus by adulthood.
How to Open an NPS Account?
You can open an NPS account online in under 30 minutes using Aadhaar OTP e-KYC via the eNPS portal, or offline at a PFRDA-empanelled PoP branch by submitting a Composite Application Form with PAN, Aadhaar, a photo, and your initial contribution.
Online Process
The online route is available through Shriram Financial Services' digital Point of Presence (PoP) interface. Here is the step-by-step process:
Visit the Portal
Visit eNPS or Shriram's NPS registration page
Select Subscriber
Choose Individual or Corporate NPS; no docs needed
Choose Your PFM
Select a PFRDA-registered Pension Fund Manager
Pick Investment
Choose Active Choice or age-based Auto Choice
Add Nominee & Bank
Add nominee details and bank account info
PRAN Generated
Your 12-digit PRAN is sent to mobile and email
Offline Process - PoP/Bank Branch
Best for subscribers who prefer an in-person experience, including senior citizens, first-time investors, and those in semi-urban or rural locations. NPS accounts can be opened through any PFRDA-empanelled PoP, which includes major banks, post offices, and NBFCs.
Visit a PoP
Visit a Shriram branch or an empanelled PoP
Complete the Form
Fill out the NPS registration form (CAF/CSRF)
Submit Documents
Submit KYC documents and initial contribution.
Verification
PoP verifies and forwards your application to CRA
PRAN Dispatched
PRAN card is dispatched within 10-15 working days
Existing NPS subscribers can manage their accounts, including contributions, fund manager switches, nomination changes, and withdrawal requests, through the CRA portals.
Who is Eligible to Open an NPS Account?
Any Indian citizen - resident, NRI, or OCI - aged 18 to 85 with a valid PAN and Aadhaar can open an NPS account. HUFs and PIOs are not eligible. Only one PRAN is allowed per person. Government employees joining on or after 1 January 2004 are mandatorily covered.
Eligibility for Individual Subscribers
Parameters
Requirement
Citizenship
Indian citizen (resident, non-resident, or Overseas Citizen of India / OCI)
Age
18 years to 85 years at the time of account opening
KYC Compliance
Valid KYC mandatory - PAN + Aadhaar (OTP-based eKYC accepted online)
Not Eligible
Hindu Undivided Families (HUFs) and Persons of Indian Origin (PIOs)
Legal Competency
Must be legally competent to execute a contract under the Indian Contract Act, 1872
Existing Account
An individual can hold only one NPS account (one PRAN). Duplicate accounts are not permitted.
NPS Vatsalya
Minors below 18 years can be enrolled by parents/guardians under NPS Vatsalya
Eligibility for Corporate Subscribers
Parameters
Requirement
Entity Type
Companies (private/public limited), LLPs, partnerships, trusts, NGOs, and other legal entities
Registration
Entity must register with a PFRDA-empanelled PoP. Shriram Financial Services facilitates Corporate NPS registration end-to-end
Employee Coverage
Corporate can enrol individual employees under the Corporate NPS model
Mandatory Contribution
Not mandated by law for the private sector; voluntary adoption as an employee benefit
Minimum Employees
No prescribed minimum - even small businesses can adopt Corporate NPS
Government Entities
Central and State Government employees are mandatorily covered under NPS (joining on/after 1 Jan 2004)
Note: NPS is strictly an individual account - it cannot be opened jointly or on behalf of another person (except NPS Vatsalya, where a guardian manages the minor's account).
Documents Needed to Open an NPS Account
For Individual Subscribers
Documents
Details / Accepted Formats
Identity Proof
PAN Card - mandatory for all subscribers
Address & Identity (KYC)
Aadhaar Card (OTP-based eKYC for online; physical copy for offline)
Address Proof (offline only)
Voter ID, Passport, Driving Licence, or utility bill (within 3 months)
Bank Account Proof
Bank account number, which will be confirmed through the Penny Drop verification process
Initial Contribution
Minimum ₹500 (Tier I) - via UPI/net banking/debit card (online) or cheque/DD (offline)
For Corporate Subscribers
Documents
Details / Accepted Formats
Entity PAN
Copy of the company / entity PAN card
Incorporation Proof
Certificate of Incorporation copy
Address Proof
Registered office address proof of the entity
MOU
Memorandum of Understanding executed in the prescribed PFRDA format
Bank Account Proof
Original cancelled cheque of the entity bank account
Tax Registration
GST certificate copy
Most individual documents are verified digitally through Aadhaar OTP during online registration. Physical document submission is required only for offline PoP-based applications or for non-standard applicant profiles.
NPS Calculators & Tools
How much will your NPS corpus be worth at retirement? The answer depends on how much you invest, how long you invest, and the returns your chosen fund earns. Our NPS Return Calculator removes the guesswork, giving you an instant, personalised projection of your retirement corpus and estimated monthly pension.
NPS Contribution Limits & Rules
NPS offers substantial flexibility in contribution amounts, with no upper limit on how much you can invest annually. What the rules do define are minimum thresholds to keep the account active and the tax-deductibility ceilings. Here is a complete breakdown:
Contribution Parameters
Tier I Account
Tier II Account
Minimum to Open an Account
₹500
₹1,000 (requires active Tier I account)
Minimum Annual Contribution
₹1,000 (to keep the account active)
No minimum annual requirement
Maximum Annual Contribution
No upper limit
No upper limit
Frequency
No restriction - contribute any number of times
No restriction
Mode
UPI, net banking, debit card, cheque, NACH auto-debit
Same as Tier I
Tax Deductibility
As per the Income Tax provisions [Section 80CCD(1), 80CCD(1B), Section 80CCE, 80C/80CCD(1), 80CCD(2)]
Only Central Govt. employees (₹1.5 lakh, 80C, 3-year lock-in)
What Returns Does NPS Offer?
NPS offers market-linked non-guaranteed returns from a diversified equity-debt portfolio managed by a Pension Fund Manager (PFM). Historically, NPS equity funds have delivered roughly 10%–14% annualised returns over 10-year periods, while debt funds have generated returns broadly in line with long-term fixed-income benchmarks. Past performance does not guarantee future results.
Active Choice vs. Auto Choice - which allocation mode fits you?
NPS gives subscribers full control over how their corpus is invested through two distinct allocation modes:
Active Choice
It lets you decide how your investments are allocated across Equity (E), Corporate Bonds (C), and Government Securities (G) based on your risk appetite and investment preferences, making it suitable for investors with specific risk-return preferences. Equity allocation can be up to 75%, subject to applicable limits.
Auto Choice
It is a life-cycle-based investment option that automatically adjusts your asset allocation based on your age, gradually reducing equity exposure as age increases. It offers Aggressive, Moderate, and Conservative Life Cycle Funds, making it an ideal option for investors who prefer a professionally managed, hands-off investment approach while helping to manage investment risk closer to retirement.
PF Scheme (MSF Scheme)
The Pension Fund (PF) Schemes under the Multiple Scheme Framework (MSF) allow subscribers to choose from multiple pension schemes offered by Pension Funds based on their risk appetite, investment preferences and retirement goals. Depending on the scheme, equity exposure can be up to 100%.
Note on MSF Switching Options
- During the vesting period: Subscribers can switch from an MSF Scheme to a Common Scheme, but cannot switch directly from one MSF Scheme to another MSF Scheme.
- After the vesting period: Subscribers can move their funds across MSF Schemes, subject to the applicable NPS rules.
Asset Class
Description
Risk Profile
Typical Allocation (Active, age < 50)
Equity (E)
PFRDA-regulated, diversified equity funds
Moderate–High
Up to 75%
Corporate Bonds (C)
AAA-rated and government-owned corporate debt
Low–Moderate
Up to 100%
Government Securities (G)
Central and State Government bonds
Low
Up to 100%
NPS Withdrawal & Exit Rules
Understanding NPS withdrawal rules is essential before you invest. PFRDA has progressively liberalised withdrawal norms, and the 2024–25 amendments have given subscribers meaningfully greater control over their corpus.
Exit Type
Condition
Total Corpus
Withdrawal Rule
Normal Exit
On attaining 60 years of age / employer's retirement age / completion of 15+ years of subscription
Up to ₹8 lakh
100% withdrawal as lump-sum
Normal Exit
On attaining 60 years of age / employer's retirement age / completion of 15+ years of subscription
More than ₹8 lakh and up to ₹12 lakh
Up to ₹6 lakh as a lump-sum; the remaining amount to be used for annuity purchase
Normal Exit
On attaining 60 years of age / employer's retirement age / completion of 15+ years of subscription
More than ₹12 lakh
Up to 80% as a lump-sum; at least 20% to be used for lifetime annuity purchase
Premature Exit
Before attaining 60 years of age or before completing 15 years of subscription
More than ₹5 lakh
Up to 20% as a lump-sum; at least 80% to be used for lifetime annuity purchase
Premature Exit
Before attaining 60 years of age or before completing 15 years of subscription
₹5 lakh or less
100% withdrawal as a lump-sum
Exit Due to Death
On the death of the subscriber
Any corpus amount
Nominee receives 100% as a lump-sum, OR nominee may use the entire corpus to purchase an annuity, OR nominee may continue under NPS by opening an individual NPS account
How is NPS Taxed?
NPS enjoys an EET (Exempt-Exempt-Tax) tax treatment structure - contributions and investment growth are exempt from tax, while annuity income in retirement is taxed. Here is the complete tax picture at exit:
NPS Component at Exit
Tax Treatment
Applicable Section
60% Lump-Sum Withdrawal at Maturity
Fully tax-free
Section 10(12A)
Annuity Purchase Amount (20% minimum)
Exempt at time of purchase
Section 80CCD(5)
Monthly Annuity Income (post-retirement)
Taxable - at slab rate as ordinary income
Section 80CCD(3)
Partial Withdrawal (up to 25% of own contributions)
Tax-free
Section 10(12B)
Premature Exit - Annuity Purchase (80%)
Exempt at time of purchase; annuity income taxable
Section 80CCD(5) / (3)
Death of Subscriber - Corpus to Nominee
Entire corpus paid out; tax treatment per nominee's slab
PFRDA Regulations
NPS Fees & Charges
The complete breakdown of the NPS fee structure:
PRAN Card & CRA Annual Maintenance Costs
Charge Type
Protean (NSDL) CRA
KFintech CRA
PRAN (Account Opening)
₹40 (physical PRAN card) / ₹18 (ePRAN)
₹39.36 (ePRAN) / ₹4 (physical)
CRA (Charge structure applicable from 01.10.2025)
Charges
Through cancellation of units at the end of each quarter
CRA Opening charges: INR 40/- (For physical PRAN Kit)
-
CRA Opening charges: INR 18/- (For ePRAN Kit through email)
-
Charge per transaction: NIL
-
Annual Account Maintenance Charge per Account (AMC) - Government Sector: INR 100/-
-
(S) For Private Sector (NPS & NPS Vatsalya), Tier I Corpus Slab-wise Annual Account Maintenance Charge per Account (AMC)
-
AUM Slab
Amount (INR)
NIL
0
1 - 2,00,000
100
2,00,001 - 10,00,000
150
10,00,001 - 25,00,000
300
25,00,001 - 50,00,000
400
Above 50,00,000
500
PoP Charges
Charge Type
Rate
Minimum Charge
Deduction Frequency
POP Charges
0.20% p.a. of Assets Under Management (AUM)
₹30
Deducted quarterly at 0.05% of AUM (end of each quarter)
Payment Gateway and Fund Management Charges
Contribution payments via UPI and net banking are free of gateway charges. Credit card contributions attract a payment gateway surcharge, typically 0.90%–1.80% charged by the payment gateway provider, not PFRDA. The single most compelling cost advantage of NPS is its Fund Management Charge (FMC), capped by PFRDA. The applicable charges are provided in the table below.
AUM Slabs (₹ Crore)
Investment Management Fee (IMF) - Non-Government Sector Subscribers (NGS)
Up to 25,000 Cr.
0.12%
Above 25,000 Cr. to 50,000 Cr.
0.08%
Above 50,000 Cr. to 1,50,000 Cr.
0.06%
Above 1,50,000 Cr.
0.04%
- The above Pension Fund charges are effective from 1st April 2026.
- For the latest charge/fee structure for NPS, please visit npstrust.org.in/charges-under-nps.
How We Verify NPS Information
At Shriram Financial Services, all NPS content published across our website is researched, verified, and updated using primary regulatory sources. Our methodology is designed to meet the highest standards of accuracy, transparency, and trustworthiness for our readers:
Primary Source
All regulatory, eligibility, tax, and contribution information is sourced directly from the Pension Fund Regulatory and Development Authority (PFRDA), the NPS Trust, and official PFRDA circulars and gazette notifications.
Tax Provisions
All Income Tax Act references are verified against the Income Tax Act, 1961, as amended for FY 2025–26 (AY 2026–27). Provisions cited are applicable as of the date of publication.
CRA Fee Data
Charge structures are sourced from the official NSDL CRA and KFintech CRA fee schedules, updated as of June 2026.
Return Data
Historical NPS fund performance data is sourced from the NPS Trust's published performance disclosures. No guaranteed return projections are made; all calculator outputs are illustrative.
Content Update Schedule
This page is reviewed and updated quarterly/within 30 days of any PFRDA circular or regulatory amendment that materially affects NPS rules, charges, or tax treatment.
NPS vs. Mutual Funds vs. Direct Equity
Parameters
National Pension System (NPS)
Mutual Funds
Direct Equity
Primary Objective
Long-term retirement planning with regular pension income
Goal-based wealth creation and financial planning
Long-term wealth creation through stock investments
Returns
Market-linked returns based on chosen asset allocation and Pension Fund Manager
Market-linked returns based on the selected mutual fund scheme
Market-linked returns based on individual stock performance
Liquidity
Limited, with withdrawals governed by PFRDA regulations
High liquidity with easy redemption (except lock-in schemes like ELSS)
High liquidity; shares can generally be bought and sold on trading days
Tax Benefits
Eligible tax deductions under applicable sections of the Income Tax Act, including an additional deduction under Section 80CCD(1B)
Tax benefits are available only on eligible schemes such as ELSS
No tax deduction on investments
Retirement Income
Mandatory annuity purchase (subject to applicable rules) helps provide a regular pension after retirement
No annuity or pension feature
No annuity or pension feature
Risk Level
Moderate, with diversified investments across equity and debt
Varies based on the type of mutual fund
Generally higher, as investments are concentrated in individual stocks
Investment Management
Managed by professional Pension Fund Managers
Managed by professional fund managers
Managed by the investor, requiring active monitoring and decision-making
Best Suited For
Investors looking to build a retirement corpus with tax benefits
Investors pursuing financial goals such as education, home purchase, or wealth creation
Experienced investors seeking higher return potential and willing to take higher risks
Action
Key Takeaway
NPS is best suited as a core retirement planning solution, offering long-term wealth creation, tax benefits, and a regular pension through an annuity. Mutual funds are ideal for achieving diverse financial goals with greater liquidity, while direct equity is better suited for experienced investors seeking potentially higher returns through active portfolio management.
Contact & Support
Contact Shriram Financial Services for personalised NPS guidance.
Open Your NPS Account in Minutes
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Got Questions?
View All FAQsTier I is the mandatory primary pension account. It has withdrawal restrictions, offers all NPS tax benefits, and requires a minimum annual contribution of ₹1,000. Tier II is an optional, flexible savings account with no lock-in, full withdrawal flexibility, and no mandatory annual contribution, but tax benefits are limited to Central Government employees only.
Both are excellent, PFRDA/government-backed, long-term instruments. NPS offers the exclusive ₹50,000 additional deduction under 80CCD(1B), market-linked return potential, and the Corporate NPS benefit for employer contributions. PPF offers full liquidity at maturity with no mandatory annuity purchase. For most investors, a combination of both is optimal.
Yes. NPS, PPF, and EPF are entirely separate instruments. You can maintain all three, as each serves a distinct function in a comprehensive retirement plan.
Nothing changes. Your PRAN (Permanent Retirement Account Number) and all accumulated corpus remain intact regardless of employer changes. In Corporate NPS, if your new employer also offers NPS, contributions simply shift to the new employer's PoP. If the new employer does not offer Corporate NPS, you can continue contributing to your existing account as an individual subscriber under the All Citizen Model, using the same PRAN.
Still got questions?
Our NPS experts will help you choose the right allocation, PFM, and tax strategy for your retirement goals.