NPS (National Pension System) account is a retirement saving scheme run by the Government of India for government employees and the general public. It is a long-term investment scheme that helps investors get regular pension after retirement.
There is a facility to invest in this scheme till the age of 60 years. After that the pension starts. However, in the meantime, many people may have a question in their mind that how can we close this account before time and withdraw money. Let us tell you its step-by-step process.
Rules for Government servantsÂ
Premature exit from NPS for a Government employee is applicable when the employee resigns, voluntarily leaves the job, is terminated, or is removed by the Government. If the amount on the date of initiation of premature exit request is equal to or less than ₹2.50 lakh, the entire amount can be withdrawn in one go. If the amount is more than ₹2.5 lakh, at least 80% of the total pension assets should be used to purchase annuity. This will provide monthly pension to the subscriber. The subscriber will receive a lump sum payment of the remaining 20% ​​amount.
How to withdraw?
- Log in to the NPS portal.
- Go to the “Withdrawal Request” section.
- Upload the required documents and submit the request.
- The money will be transferred to your bank account once the request is approved by PFRDA.
Rules for private sector employeesÂ
If a private sector employee wishes to voluntarily close his Permanent Retirement Account Number (PRAN), the premature withdrawal rule applies, provided he has been registered with NPS for five years. If the corpus on the date of initiation of premature withdrawal request is equal to or less than ₹2.50 lakh, the entire corpus can be withdrawn as a lump sum, as is the case in the government sector.
Similarly, if the corpus initiated is more than ₹2.5 lakh, at least 80% of the corpus must be used to purchase annuity. For subscribers joining NPS after the age of 60, premature withdrawal applies before completion of three years under NPS. The rules and regulations for the non-government sector are the same as for subscribers who joined NPS before the age of 60. In case of untimely death of the subscriber, his nominee will receive the entire amount as a lump sum payment, or the nominee can choose to receive annuity.
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