NPS Withdrawals Rule: Partial withdrawal is allowed during the tenure of the NPS scheme to meet the needs like children’s education, buying a house, treatment of serious illnesses etc.
New Delhi. If you also want to get a big pension after your retirement, then National Pension System (NPS) can be a good option for you. NPS is a government scheme, which is linked to the market, that is, its return is based on the market. In this scheme, you get the benefit of monthly pension after maturity. If you want, you can also do partial withdrawal at the time of need.
As per NPS Tier-I norms, a person can exit the scheme only after turning 60 years old. Since the aim is to save for retirement, the rules do not make regular withdrawal easy. However, subscribers have the option to make partial withdrawals during the scheme term for urgent needs. Let’s know about the rules for partial withdrawal and premature exit
Partial Withdrawal
NPS allows subscribers to make partial withdrawals for specific purposes after a lock-in period of 3 years.
- After completion of 3 years, you are allowed to withdraw only 25% of your contribution (excluding earn returns).
- Contributions made by your employer to your NPS account will not be considered for calculating the partial withdrawal limit.
- You can make such withdrawals a maximum of 3 times during the entire investment period.
- One can make partial withdrawal to purchase a house, treatment of serious illnesses, disability, education, marriage of children or to start a new venture.
Premature exit
NPS account remains open till the age of 60 years, but you can exit it even before that, but for this you will have to pay some price.
- First of all, you can exit this scheme only after completing 5 years. If you have started investing in NPS after completing 60 years of age, then you can withdraw money after three years.
- You can withdraw only up to 20 per cent of the amount as a lump sum.
- In case of premature withdrawal, you will be able to withdraw only 20 per cent of the fund in lump sum.
- You will have to use the remaining 80 percent of the money to buy annuity. This amount will be used to give you pension for life.
- If the total amount deposited in your fund is less than Rs 2.5 lakh, then you will be allowed to withdraw the entire amount in one lump sum.
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