What is NPS?
NPS is known as the National Pension System. It is a retirement savings scheme. In this scheme, people who are earning can save a certain amount for their future while working anywhere. NPS inculcates a habit of savings while working for retirement. The eligibility criteria are straightforward. Employees working with corporate companies between 18 to 60 years can be a part of NPS. KYC norms are mandatory to sign up for NPS. It is one of the best schemes to save money for the future.
We all know that we also need money security for an easy life after retirement, that needs retirement planning. Such savings work as a backbone in our hard days. Day by day, medical expenses are rising high and apart from this, other unexpected expenses can also appear anytime. NPS gives us financial stability and security after retirement. As we grow old, we lose our energy to work and earn income regularly.
The moment we feel that we cannot continue working regularly after reaching a certain age, we prefer to retire. In such a situation, NPS proves to help maintain and continue living the life we live before retirement. NPS gives us maximum benefit and a tension-free life post-retirement.
We should plan early to opt for NPS. A successful financial backup plan can solve most financial problems after retirement. That’s why here we’ll talk about how we can get higher returns on our hard-earned money.
Benefits of NPS
National Pension System offers so many benefits. It has a very flexible system to start our savings. We can opt for NPS at any time in the year. It is a trustworthy system, offering higher returns and a simple account opening process. Let’s look at them and get to know more about them.
- It is a voluntary system – Any subscriber can opt for NPS in a Financial Year. Subscribers can also change the amount of the savings every year.
- Account opening is so simple – To open the account, subscribers need to go to eNPS (https://enps.nsdl.com/eNPS/).
- It is very flexible – Subscribers can easily choose their investment options and pension fund. Subscribers can also see their money grow.
- The portable option is here – Subscribers can access their account anywhere, even from another city and employment.
- Trustworthy regulation – PFRDA regulates NPS and provides transparent investment norms and regular monitoring. Fund managers of NPS Trust review its performance.
NPS Pension Calculator
It is always advisable to check how the interest is calculating against our investment or fix the deposit amount. Here we can take help from the National Pension System calculator. It’s an easy method to calculate interest. The interest is calculated by multiplying the principal, interest rate, and tenor. The formula for Simple Interest (SI) is “principal x rate of interest x period divided by 100” or (P x Rx T/100).
Below is the step-by-step method to use the NPS calculator. Details are required to enter systematically.
Step 1: Put Date of Birth (DOB). The NPS calculator will compute the number of years to calculate the interest based on the DOB.
Step 2: Put in the investment amount you want to contribute every month.
Step 3: Select the desired number of years to estimate the amount of investment.
Step 4: Enter the percentage of the annuity amount.
Step 5: Enter the expected annuity rate, i.e. the rate of interest.
Step 6: Once you finish entering all the details, the National Pension Scheme calculator will calculate the estimated amount and the pension amount you’ll receive by the time of maturity.
60% of the corpus that an investor accumulates in his NPS account can be withdrawn directly after retirement. The remaining 40% is paid in the form of a monthly pension.
Up to 25% of the accumulated corpus can be withdrawn before retirement for specific purposes like a child’s education or marriage, medical treatment of family members, etc. A total of 3 withdrawals are permitted during the entire period and the gap between each withdrawal should be at least 5 years. Also, the early withdrawal is only applicable once the investor contributes up to 3 years or more in NPS.
Despite the various benefits provided by NPS, it is essentially a long-term investment option. Therefore, if an investor is looking for investment options that can also provide enough liquidity options and an option of choosing flexible tenors, he can invest in a fixed deposit. To earn enough returns through FDs, he must invest in a corporate FD like the one provided by Bajaj Finance. Bajaj Finance FD grows investment at interest rates of up to 6.75%. This FD interest rate is high enough to multiply returns at a faster pace. The other options that make it a profitable option for investors are given below:
Seamless application process
The online paperless application process offered by Bajaj Finance FD enables the investors to start investing without any issues. Also, a 0.10% extra FD rate is provided to online investors.
The entire investment process can be managed online as the CKYC procedure is available for documentation and the payment can be done online via UPI or net banking. The deposits can even be made via debit cards from selected locations in India.
Flexible investment options
The flexible tenor ranging from 12 to 60 months allows the investors to manage their short-term and long-term financial requirements simultaneously. The FD calculator page that is available on the portal of Bajaj Finance lets them pick a tenor and FD type as per their investment ideas.
Easy withdrawal policies
Unlike NPS, Bajaj Finance FD lets investors withdraw their deposits before maturity. For that, the deposits need to complete at least 3 months from the date of investment. Also, if an individual is not interested in breaking the investment, he can apply for a collateral-free loan of up to 75% of the net worth of his deposits.
By investing in the non-cumulative FDs from Bajaj Finance, one can earn a regular income after or even before retirement. Senior citizens can earn extra returns as they get 0.25% higher FD rates than others. These easy and flexible options make Bajaj Finance FD an ideal investment alternative for most investors.