Everything You Want to Know About NPS | National Pension System | India's Retirement Pension Scheme
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From its modest beginnings, the National Pension System or NPS has now grown to almost 9 lakh crores in AUM. Today, this essential retirement income scheme has over 30 lakh subscribers in the all-citizen category and most additions in the 25 to 35 year age group with 28% being women. In this video, I shall explore 11 key aspects of the National Pension Scheme (as its incorrectly called) which will provide valuable information to an existing subscriber and also anyone who is still exploring it as a retirement investment option.
Some of the topics covered in this video includes
1. Benefits of NPS which includes a low-cost structure, tax breaks for individuals, market-linked returns, easy portability and professional management
2. Eligibility which covers resident Indians, NRIs, OCIs, PIOs, HUF etc.
3. Types of NPS accounts and the difference between Tier-1 NPS and Tier-2 NPS accounts
4. Asset Classes which includes Class E (Equity), Class G (Government Securities), Class C (Corporate Debt) and Class A (Alternative Investment Funds)
5. Difference between auto choice and active choice
6. Pension Fund Managers and their performance across time period and asset classes
7. How to Open an NPS account either online or offline
8. How to Operate an NPS account
9. Withdrawals where we examine our options before and after retirement including partial withdrawals
10. Annuities and how the subscriber can secure a fixed monthly income during one's retirement years
11. Taxation rules on NPS contributions, returns, and withdrawals
👉 Open your NPS a/c with Fisdom:
fisdom.onelink.me/VCH6/Shanka...
👉 Video Chapters:
00:00 National Pension System
01:01 1. Eligibility & Benefits
02:20 2. NPS Fund Architecture
04:08 3. Asset Classes
05:18 4. NPS Auto Choice vs Active Choice
08:39 5. Performance of NPS Funds
11:59 6. Pension Fund Managers in India
13:56 7. Enrolling into NPS
15:24 8. Operating your NPS Account
16:53 9. NPS Withdrawal Rules
19:34 10. Annuities and Pension
22:01 11. NPS Taxation
25:12 Shankar's Viewpoint
👉 Useful Reading Resources:
‣ Economic Times article on NPS: economictimes.indiatimes.com/...
‣ PFRDA FAQ on all-citizen category: www.pfrda.org.in/writereaddat...
‣ Useful table of rules on exiting NPS: npscra.nsdl.co.in/nps-exit/
‣ Information & FAQ on NPS withdrawals: npscra.nsdl.co.in/all-faq-wit...
‣ VRO page on NPS performance: www.valueresearchonline.com/n...
‣ NPS Trust webpage on performance of different NPS schemes: npstrust.org.in/return-of-nps...
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#nps #nationalpensionsystem #nationalpensionscheme #retirementplanning #pension
Disclaimer: I am not a SEBI registered investment advisor or research analyst. I am not registered with PFRDA or IRDA either. The content posted on this platform is purely for educational purposes and none of it constitutes investing or trading advice. Viewers should do their own research and diligence before investing or acting on the information presented
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Your command over English, the break down of NPS and to put down all points in simple layman's term is commendable, plus, not to forget the hard work on research and presentation is impeccable, ❤
Thanks for that! The use of audio and visual allows me to access different senses in the viewer's body (ear, eyes, brain) .. glad to know it all comes together in these videos to help you learn and retain information
There is no INSIGHTFUL AND better video on NPS THAN THIS... AMAZING Shankar continues to be the best and better than the rest. ALWAYS
Thank you Rohan ji. Glad you found this video useful and informative.
Completely agree with you. No other source is so simple, comprehensive and easy end-to-end process insights
I agree with compliments 👍
Really nice video, I searched for multiple videos for NPS. Here is what stood out for me in this video -
The video is running at such a steady pace that we can get involved yet not feel that the video is running. Reminds me of my days in graduation, there is always that one teacher who explains in a calm manner, thank you!
Glad you liked the content and video, Yuvraj ji. Much appreciated 🙌
I was looking at videos about nps just this morning, today is my lucky day
Damn, if the markets were open today .. you could have made a killing :) .. ah well, enjoy the video!
That's called AI
Wow Shankar ji, such a detailed video. I can only imagine the amount of efforts you have put into it. Hats off to you sir.
Thank you very much for your kind appreciation. Most videos take about 5 days of effort (2 days in research and scripting, 0.5 days in recording, 2 days in editing & 0.5 days in other activities like uploading, answering comments etc.)
Excellent Video, Mr. Shankar. Simple, straight forward and comprehensive. Thanks.
Thank you very much 🙌
What a perfect video! Thanks a ton for making such a comprehensive video on the topic. 🙏👏
Most welcome. Glad you found it informative
Shankar - You are Rohit Sharma + Virat Kohli combined. Superb explanations. Your one video gives not only the overall picture but also with great details. Thanks for doing detailed research in preparation for this video.
Thank you very much 🙌 .. albeit I have no plans to retire!
Very detailed video and regarding annuities, i had questions from last 3 years from now and they got cleared.
Glad to hear that!
Content is super informative and worthy watching each second that there is no need from your side to request not to skip video !! Many Congrats on creating such a Video with sincere effort !! Way to go
Glad you liked it! Thanks for your kind appreciation
Really nice comprehensive explanation though little long but wholesome. Thank you !
You're welcome! Please utilize the 1.5x (or faster) speed option on TH-cam to save time
Thanks Shankar. Really insightful and crisp.
Most welcome. Glad you liked it!
Excellent info Shankar, Thanks!
I am your subscriber
So nice of you and thanks!
Nicely researched designed useful content 🙏.Thank you very much
You are most welcome. Glad you liked it
Absolutely detailed view of NPS...Appreciate the research and thoughts put forward
Most welcome
This is the best of the best presentation on NPS. Your value addition is wonderful.🎉🎉❤❤😀😀
Thank you very much!
Thank you Sir, what a thorough and insightful video on NPS.
Most welcome. Glad you found it useful and informative
Really appreciate your work on making informative content. Thank you sir.🥺
Thank you very much for your kind appreciation
One of the most lucid presenters out there - Thank you. 🙏
Appreciate that 🙌
Best explanation ever First time I understood clearly. Thanks
Most welcome. Great to hear! I'm happy you found it useful
Excellent presentation. Really appreciate your efforts. Thankyou
You are most welcome 🙌
Thank you so much. Really helpful and appreciate your efforts to put such clear content on NPS.
So nice of you. Thank you!
Hi Shankar, great and informative videos as always. Just a point on the scheme managers. I believe now it is allowed to choose 3 different managers for Asset Class E, C and G. However, Asset Class A has to be a manager from one of the 3 chosen for other asset classes.
Thank you. Yes, I was made aware of this now and a couple of viewers even shared screenshots. I had the feeling this was possible but couldn't find any literature to this effect - but now, its clarified.
Very clearly explained sir. I would share your video with youngesters. Keep it up.🎉
Thank you very much! 🙌
Excellent and very informative presentation 👏👏👏
Thanks Mr Shankar 🙏🙏
You're most welcome. Glad you liked it
Very nice and detailed explanation Sir. Thanks!
So nice of you. Most welcome!
Beautifully put. Thanks
You're very welcome
The amount of research that must have gone into making this video! So informative. This should be behind a paywall. Can’t believe this is free.
:| not heard about adsense?
Hi, for my understanding on perspectives:
@dpacsaml - how much should one charge for a video like this?
@Mysangeeet - how much do you think Adsense pays the creator for a video like this (assuming every viewer saw 2 ads)?
@@shankarnath I’m not able to comment on how much to charge Sir, but pls do check out Anand Srinivasan. He gives investment advice on the stock market (in tamil) and has written books, does tours where people can come meet him and ask qns, gives out interviews etc. He also used to meet people 1-1 for a fee (but I think he’s stopped doing this now as he’s become too popular).
Ultimately people will pay for quality content.
Very insightful video. ❤
Glad it was helpful!
Excellent video ..... Deserves more views
Thank you!
You have done extremely good job by providing various opportunities in NPS which surely would provide idea to individual to select and design life
Thank you for the kind words, Sandip ji
Thank you, great video
You are most welcome! 🙌
Very detailed.. finally i got some grip on this topic
Glad you found it useful 🙌
Many thanks, it is a wonderful video.
Thank you
Great video and explanation.. Simple and effective..
Glad you liked it
Neatly explained...
Thanks
Really good video sir, thank you
You are very welcome, glad you liked it
Thanks Sir , well explained 👏
Most welcome! Glad you liked it
Fantastic video sir. Very informative
Glad you liked it
Thanks for the detailed video!
Most welcome
Thank you. This was helpful.
Most welcome!
Pension part should be tax free and managed by PFRDA or Central Government …… because no one can predict what will happen if private annuity manager company defaults or could not manage regular Pension Payouts.
Very nice video! Sir!🎉
Thank you!
Very insightful video
Glad it was helpful!
Very Informative
Glad you liked it
Concise and best NPS explanation from you
Thank you!
Thank you, Very helpful
You're welcome!
Good Information. thank you
Glad it was helpful!
There is one NPS TTS which is only for central government employees. Active choice for govt employees is all in government securities.
Excellent video
Thank you very much!
Actually good u did on NPS , lots of negatives circulating about it
Glad you found it useful!
nicely articulated
Thank you!
Complete and fantastic video of about NPS so far among watched by me 😅
Thank you. Glad you liked it
Excellent video..
Glad you liked it!
Great presentation
Thank you!
Great video..I have a query - I have choosen Tata from the tier list .little afraid becoz i didn't see any return% from the tata fund manager in this video.how do you see it ? Any suggestion pls share
@shankar Ji - the site now allows choosing different fund manager for each asset class - hope you can update the same in your otherwize excellent video
Unfortunately, I can't update it within this video as no video platform allows modifications. I'll add it when I do a followup video on this.
quality content
Thank you! 🙌
Holistic View on NPS. ❤
Glad you found it useful!
thanks a lot
Welcome!
@shankarnath The NPS scheme is now open to Non Resident Indians (NRIs) & Overseas Citizens of India (OCIs), but currently it is limited to Tier 1 account only.
Very informative,
Glad it was helpful!
Please make a video with examples of SLW system and the transaction charges one has to bear alongwith tax benefits.
Thanks for the suggestion
Very very informative vdo
So nice of you. Thanks!
Sir very nice video 🙏
Thank you 🙌
Dear Sir, thank you for creating such insightful content. One correction - as of this year, we're allowed to select different managers for different schemes. I myself have selected LIC for "G", while HDFC for all others.
Most welcome, glad you liked it. Yes, I got to know this now .. and I'll update all viewers later tonight on this (and other changes I missed out on) via a pinned comment. Thanks for letting me know.
@@shankarnathSir what is the minimum rate of interest we can expect in NPS?
I have PPF . So can I open a NPS ACCOUNT for my 3 year old child.I am 44.
Hi - both questions were addressed in the video. Kindly have a watch pls. To recap:
1. NPS does not offer an interest rate but returns are market linked
2. NPS is for Indian citizens aged 18 years and above
@@shankarnathAllowed only by NSDL, not the other CRA's.
@@shankarnath thank you so much for the instant response.
thanks
Nice job Ji 🙏🙏
Thanks a lot
Minimum contribution in TIER 1 NPS account per year is INR 1000 Sir..
Your presentation was excellent and timely since i had joined ICICI PRU PFM as their Pension Advisor only recently and needed clear information to take the concept forward and to my Clients.
I am a Mutual Funds Distributor Sir..
Thank You.🌷🌹
Thank you very much for clarifying on the minimum contribution, there were multiple numbers floating around. Wishing you the best!
What will happen if i haven't made any contribution for several years in NPS, how can I make it active again ?
Sir . Thanks for another detailed video.
What's the expense ratio in Tier 1 & Tier 2? For 4000 contribution each month( 80CCD2) , 25 INR is debited every month . What's the calculation?
Sir I would like to understand the return from perspective that under a regular scenario if we are under 30% tax bracket and if we are saving taxes on investment (employee contribution + employer contribution). If we consider that shouldn't return increase significantly?
Good sir 👍
Thanks and welcome
Hi Shankar, do you provide investment advise to individuals at cost? I am looking for an investment advisor and need your guidance. Thanks
NPS becomes necessary, when we are taxed 30% :D Anyway returns are also good, as its market linked. Hope corona type situatuon does not arrive at the time of withdrawal. My current IRR is 14%.
Great comprehensive video..👍 A question - Many organisations mandates retirement age at 58 years whereas NPS retirement age is 60 years. This should be changed and Govt should look into it.
Thank you for your appreciation
Nice Explanation Shankar! However, as NPS is retirement, instruments, so can you also make content on Guranteed return income like jeevan umang etc
Thank you Gourav ji for the suggestion. I'll add it to my content queue.
Thanks for nice explanation , kindly note that minimum contribution is Rs 1000.00 in Tier 1 to avoid the freezing of the account , earlier this was Rs. 6000.00 .
Most welcome. Can you share the article on this change from 6k to 1k? I'm unable to find one. Thanks!
@@shankarnathshared your video.
Can you please suggest the best investment for a 3 year old child.
I am 44 and need to invest wisely for my child.
@@shankarnath what will be the maximum contribution in Tier-1 per annum?
No upper limit
Shankar Sir, please make a video on financial and retirement planning
Thanks for the suggestion, I'll try
Please tell how much maximum equity allocation allowed in NPS tier 2 active choice for both govt employee and private sector employee currently...
one correction i think: Minimum is 1000 per year (not 6000)
What is standard choice apart from auto and active??
NPS showed how to do a SIP on its Tier 2. But it did not show how SEP could be stopped!! Any one knows how this can be done ?
Nice one Shankar ❤... I too used to think NPS stands for national pension scheme...I actually started my tier 1 account after seeing your video in ETmoney..so far returns are good..but then I need to see how it performs during downturns...have opted for active choice..E60:C20 G15 A5...you could have covered a little more on how to port from one to another pension fund.and also the charges that are involved ..and also on which/how to decide on annuity selection..looking forward to your video on whether to opt for more pension and less EPF...
Thank you very much!
Govt must make NPS more attractive. In its present form, its just not good enough. I have seen college Professors, school principals & state govt employees getting pension equal to minimum wage post retirement. People would keep demanding return to old pension system if this continues.
Obviously old pension scheme remains a better option over nps
I am amazed that people who joined service post NPS retired already.
There is an option where you can opt for a sum when you retire and the rest is given in monthly installments. It is very possible that they took a bulk out when they retired or their contribution when they were in service was minimum.
Assuming the NPS is inherently bad is wrong. There are factors that are out of the control of the government.
Old pension system is good for the employees but very bad for the government. With NPS they tried to cut their expenditure on pensions but many governments rolling back to OPS is wrong too.
Sir, i have read from many sources that class E returns are not at par with the index. However, with the tax benefits, i think they outperform the index isnt it?
Kindly provide link for any Nps calculator for central government employees
Great detailed video as usual! 👍
But one thing, I don't know when this was recently changed but we can now select different managers for different schemes.
I recently was able to make the switch from the nps website
Can you please explain more. You must be talking about manual allocation?
@@Mysangeeet I have choosen different AMC for different schemes. E.g SBI for scheme C
And hdfc for scheme i.e. Equities.
Thank you! I had heard something to the effect of NPS allowing separate schemes of different pension fund managers but didn't find any literature on it. But its true, the change was effected sometime this year.
Just found the video on the day uploaded
Excellent video on NPS. 02 qurried 1.The investment is monthly or yearly. I want to invest ₹50,000/- annually(once in a year) to get Tax exemption of ₹15000/-is it allowed? As FY is at end.
2 .Is such Tax exemption allowed in Tier-II?
Dear Sir, I am your regularly watching your video . thanks a lot for such a wonderful video, in which you covered all information regarding NPS.I have watched so many videos on NPS, but till date this is the best and carrying all relevant and important information in it. thanks again sir.
Sir one question , a central government employee can continue NPS after retirement with or without contribution. please clear this query.
Thank you very much, glad you found it useful. There is a useful table which might help you resolve your quandary. May I request you to have a look at it. Link: npscra.nsdl.co.in/nps-exit/
What does purchasing annuity means in early exit ?
Sir, Tier2 (E) vs N50 Index fund .
Your view.
Please tell how to rebalance NPS to generate above than average return like suppose in moderate choice if equity goes above 55 then we should rebalance back to 50,30,20 this way we can lock the profit in market run up... And when equity goes to 45 percent then we can rebalance to buy at low valuation??
Is pension from NPS for lifetime or till I exhaust the sum accumulated in annuity ?
Shankar Ji, Many thanks as you have enhanced our knowledge on "NPS"... ( R u gaining a weight) ??
Most welcome. Yes, there is some renovation work going at my place .. so I'm quite tired these last 3-4 weeks. This has affected my video schedule and my walk schedule aswell. This'll go on until the 15th of next month & then I'll spruce back to normalcy.
Hi Shankar Sir, great video. Thanks for it. However I would like to mention that we can now choose different pension fund managers for different asset class within same Tier. I am saying because in my Tier 1 account, I have HDFC as fund manager for my 75% class E holdings and LIC as fund manager for my 25% class G holdings. I hold 0% in Class C and Class A.
Thank you Saurabh. Yes, I got to know now and a couple of viewers have sent me an email from where they received that communication and even a screenshot of their NPS portal where this is enabled. I also remember reading of this happening but couldn't find any article to this effect. Thx again for letting me know, I'll update it via a community post or pinned comment for the benefit of all.
This is for Manual allocation only?
@@shankarnath Thanks Sir
@@Mysangeeet Yes. This is for Active choice.
Sir
Is it right time to investing lumpsum in nifty 50 index mutual fund?
Is opening an account online is better or offline? Or it makes no difference?
Very informative indeed. Thanks Shankar for this.
Any idea what is the benchmark against which the funds are being compared?
Most welcome. Benchmarks available in 09:24
@@shankarnath Thank you. What is not clear is that whether class E funds will always follow Nifty 50 index or it is just a choice of all funds as of date. Can fund managers change course?
I couldn't find any data about expense ratio as well.
You clearly said taxation is not your forte, but there seems to be confusion on how tier 2 gains are taxed. What I read is that it will be at 20% with indexation after 3 years. But that is potentially high in comparison with Nifty 50 index funds in a brokerage account where it will be 10% LTCG.
1. The PFRDA has some guidelines on the kind of stocks that a fund manager can invest into. I read about it somewhere a couple years back, maybe in some news article. Something in the lines of top 200 companies with F&O participation. I also read that PFRDA has relaxed some of it. So, the size and shape of Class E (or any other class) will continue evolving.
2. Expense ratio information can be found on the pension fund manager website
Sir better compare NPS with OPS for government employees