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National Pension Scheme or NPS began as a retirement investment scheme for Indian Government employees. However, the scheme has been open to all since 2009.
Further, the scheme has two investment accounts, namely Tier 1 and Tier 2. This article will look into the details of the NPS Tier 2 account.
Tier 2 is an add-on account to a Tier 1 account. The Tier 1 account is absolutely mandatory, while the Tier 2 account is a voluntary account for savings. The NPS Tier 2 account is associated with greater flexibility, and one can withdraw from the account at any time.
Some of the NPS tier 2 account benefits and features are as follows:
Only subscribers of Tier 1 NPS accounts can open NPS Tier 2 accounts. The activation of a Tier 1 account is available only for Indians and not for NRIs.
Furthermore, any person can simultaneously open NPS Tier 1 and 2 accounts. Lastly, all government subscribers covered under NPS can activate an NPS Tier 2 account.
Follow these steps to open a Tier 2 NPS account online.
Step 1: Visit the official website.
Step 2: Enter the PRAN or Permanent Retirement Account Number. You should have received this number at the time of joining the NPS Tier 1 account.
Step 3: Next, enter the date of birth, PAN, and captcha code.
Step 4: Select "Verify PRAN".
Step 5: There is no minimum balance required to be paid.
To open an NPS Tier 2 account offline, visit your bank's branch and apply for the NPS Tier 2 account opening.
The NPS Tier 2 eligibility criteria are as follows:
There are 2 investment methods available for NPS Tier 2. They are:
A user plays a proactive role and invests in the available investments.
In this method, the user has to choose the risk profile, and NPS will select the investment units based on risk and age profiles.
Every year the equity portion is reduced, and a movement to debt investments is made so that your assets remain safe.
You can invest up to the age of 60 and defer the account's maturity when you reach 60 years for another 10 years. However, further investments are not needed after deferment.
There is no NPS Tier 2 minimum contribution per year. The minimum initial contribution is ₹ 1000.
There is no maximum investment in NPS Tier 2 Accounts.
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Disclaimer: This information is added only for informative purposes and collected from different sources across the Internet. Digit Insurance is not promoting or recommending anything here. Please verify the information before making any decisions.
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