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Nation pension System Tier 2 Account: After retirement, there should not be any problem of money, for this, regular income is needed for life to go on without financial trouble. And for regular income, retirement planning is very important.
People invest in different schemes for retirement planning. A good option for investing in pension planning is the National Pension Scheme (NPS). This is a pension scheme run by the government. NPS (Nation pension System) is a long term investment plan. By investing in this scheme, a large lump sum fund is available on retirement. In this, pension is received every month based on your annuity amount and its performance.
There are two types of accounts in the Nation pension system scheme. It consists of Tier- 1 (Tier-I) and Tier- 2 (Tier-II) accounts. Tier-I is the primary account, which is important for pension and tax benefits. At the same time, Tier-II is a voluntary account. It is also called investment account. Everyone knows about Tier 1 that a regular amount has to be deposited in it every year. Investment in this plan comes under the purview of income tax exemption.
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But what is this Tier 2 account, and what are its benefits, little is known about it. NPNS Tier 2 is being explained in detail here.
NPS Tier-2 Account
NPS Tier-2 account is voluntary. This is purely an investment account. There is no benefit of tax exemption on Tier-2 account but, it is a great savings option. NPS Tier-2 account is a liquid account. Through this, you can choose the plan of equity, government or corporate layer investment. This is a good option for creating a contingency fund.
You can invest and withdraw money anytime in NPS Tier-2 account. Even you can deposit and withdraw money in it in a day. Like Tier 1, there is no minimum investment limit.
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Tier 2 NPS account has more flexibility in terms of withdrawal. No exit load is charged when you withdraw funds from your Tier 2 NPS account. However, NPS Tier 2 investment is not tax free.
Who can open account
To open a Tier-2 account under the National Pension System, you must have a Tier-1 account. Tier-II account can be opened with Rs.1000/-. There is no minimum or maximum limit for investment in this. There is no fixed interest rate on deposits in this account. The returns of this account depend on the asset allocation and pension fund manager chosen by you.
Any person between the age of 18 to 70 years can open an account in the National Pension System. This scheme was only for government employees, but later it was also opened for private sector employees.
Benefits of NPS Tier 2 Account
– No additional annual maintenance charges are applicable.
A great way to save for your everyday needs.
You can withdraw money at any time.
Deposit money can be transferred to Tier 1 account at any time.
There is no minimum amount requirement in NPS Tier 2 account.
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Tags: nps, pension fund, pension scheme
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