Secure Your Retirement with HDFC NPS

Secure Your Retirement with HDFC NPS

HDFC Bank offers a convenient way to invest in the National Pension Scheme (NPS), a government-backed program designed to help you build a substantial retirement fund. NPS is a long-term investment option that provides market-linked returns and attractive tax benefits.

Investing in HDFC NPS

To open an NPS account with HDFC Bank, you can visit a designated branch or opt for the online process. Let’s check the method in both:

• Offline Investment: Visit an authorized HDFC branch offering NPS services. Complete the NPS registration form and submit it along with your KYC documents (proof of identity, address, and age). The bank will verify your details and activate your NPS account.
• Online Investment: Visit the HDFC NPS account page on the bank's website and click on "Apply for NPS." HDFC Bank partners with KFIN Technologies for online NPS applications. Fill out the online application form, choosing your preferred investment strategy and fund options. You can either be an existing HDFC Bank customer or utilize your Aadhaar card details for verification. Once the online deposit is made, your HDFC NPS account will be operational.

HDFC NPS Benefits

Here are some key advantages of investing in NPS through HDFC Bank:

• Market-Linked Returns: Your NPS contributions are invested in a variety of market-linked assets, such as stocks and bonds. This has the potential to generate higher returns compared to traditional fixed-deposit schemes.
• Tax Advantages: NPS offers significant tax benefits to encourage participation. Investments up to ₹1.5 lakh in Tier I accounts qualify for a deduction under Section 80CCD(1) of the Income Tax Act. Additionally, employer contributions towards your NPS account (up to 10% of your basic salary and dearness allowance) are also tax-deductible under Section 80CCD(2).
• Guaranteed Annuity: Upon reaching retirement age (usually 60 years), a portion of your accumulated NPS corpus is used to purchase an annuity that provides you with a regular monthly income for the rest of your life. This ensures a steady stream of income even after you retire.
• Flexible Investment Options: HDFC Bank allows you to invest in NPS through both online and offline channels. The bank also provides two investment account options: Tier I and Tier II. Tier I is mandatory and restricts withdrawals until retirement, while Tier II offers more flexibility for withdrawals but comes with some limitations on tax benefits.

Documents Required

Regardless of the chosen investment method (online or offline), the following documents are generally required:

• Identity Proof: Passport, Aadhaar card, PAN card, voter's ID card, or driving license
• Address Proof: Passport, driving license, Aadhaar card, voter's ID card, utility bills, rent agreement, or property sale deed (copy)
• Age Proof: Voter's ID card, Aadhaar card, passport, driving license, or birth certificate
• Recent Passport-Sized Photographs: for non-HDFC Bank customer

Eligibility and Account Management

To be eligible for an HDFC NPS account, you must be a resident of India between the ages of 18 and 65. Once your account is active, you can conveniently manage and track it through HDFC's net banking facility.

Tax Benefits

• Contributions towards Tier I accounts, up to ₹1.5 lakh, are deductible under Section 80CCD(1).
• For Central Government employees, Tier II account contributions with a 3-year lock-in period qualify for deductions under Section 80C, up to a limit of ₹1.5 lakh.
• Employer contributions towards your NPS (up to 10% of your basic salary and dearness allowance) are exempt under Section 80CCD(2).
• Additional investments in Tier II accounts, up to ₹50,000, can be claimed as deductions under Section 80CCD(1B).
• Upon maturity, up to 60% of the accumulated corpus in Tier I accounts can be withdrawn as tax-free income.