How to Open NPS Account in Indian Overseas Bank?

NPS stands for National Pension System which is a scheme offered to individuals interested in savings for their retirement.

It is a market-linked scheme that offers an extensive return on your investment by offering you great exposure to India’s booming economy.

The investment that you make gets invested into the stock market and it is done through a pension fund manager.

At the time of retirement, 60% of the maturity amount is available for you to take out as a lump sum amount and the rest 40% gets invested into an Annuity program. Thereafter, you will receive a monthly pension into your account for a lifetime.

You can open the NPS Account at various Points of Presence including the Indian Overseas bank which is the Government Bank in India.

In this article, we will discuss How to Open NPS Account in Indian Overseas Bank? Documents Required, Types of NPS Account, Features, etc.

How to Open NPS Account in Indian Overseas Bank

Features of NPS Account

The following are the features of the NPS Account which make it a very attractive option for retirement investment-

  • NPS Scheme can offer a higher rate of returns than other retirement investment tools like PPF Account
  • Anyone can choose to deposit funds into the NPS Account-salaried or businessman
  • You can start your investment journey with an NPS Account with as low as Rs.1000/- per annum
  • You can open the NPS account using both Point-of-Presence or using the eNPS online portal
  • The investment made in the NPS account is relatively safest as compared to other market-linked schemes as you have an option to invest your funds in the Government and Corporate securities

Types of NPS Account

The following are the two types of NPS accounts that you can choose from, each has a distinctive property that you can choose –

Tier-I

  • It is a compulsory investment account meaning for investing in the NPS Account, you would have to start with this account
  • The investment made in this account is fixed up until maturity, you cannot liquidate the account till the retirement
  • You can get tax benefits up to Rs.1.50 Lakhs with an additional Rs.50,000/- tax benefit that can be saved

Tier-II

  • A tier-II account is an optional account that you can invest in if you want
  • There is no restriction on the liquidation of this account
  • There are no tax benefits as such offered in this account

Return Offred by the Pension Fund Managers in the year 2022

The following are the best-performing NPS returns provided by various Fund Managers-

Tier-I

Pension Fund ManagersReturns*
1-year  3-year  5-year
HDFC Pension Fund25.92%17.97%17.14%
UTI Retirement Solutions25.54%16.15%15.88%
SBI Pension Fund24.15%15.98%15.39%
ICICI Pru. Pension Fund26.34%17.49%16.11%
Kotak Mahindra Pension Fund27.25%17.85%16.52%
LIC Pension Fund27.78%15.96%14.79%

Tier-II

Pension Fund ManagersReturns*
1-year  3-year  5-year
HDFC Pension Fund25.76%17.90%17.09%
UTI Retirement Solutions26.26%16.50%16.20%
SBI Pension Fund24.08%16.06%15.47%
ICICI Pension Fund26.29%17.58%16.21%
Kotak Mahindra Pension Fund27.15%17.59%16.38%
LIC Pension Fund27.78%15.84%14.52%

How to Open an NPS Account in the Indian Overseas Bank?

The following are the step-by-step instructions on how to apply for the NPS Account in the Indian Overseas Bank-

  • Visit your nearest Indian Overseas Bank and ask the bank representative for the PRAN application form
  • Now, fill the form with correct details like name, address, father’s name, nominee details, etc.
  • Make sure to mention the investment strategy that you want to choose and the pension fund manager
  • After filling out the form, you are required to attach the documents mentioned below the form and submit it to the bank representative along with the initial deposit amount
  • After submitting the form, your NPS Account request will be processed, and will receive an SMS regarding the status of your account
  • After the successful opening of your account, your NPS account will be activated and you will be provided with a PRAN Account Number which will help you in maintaining your account
  • You can add this number as a beneficiary in your Net banking or Mobile Baking to invest in the account using the online method.

Documents Required for NPS Account Opening in Indian Overseas Banks

The following are the documents required for the NPS Account opening in the Indian Overseas Bank-

  • Passport size photograph of the applicant
  • Aadhar Card copy
  • PAN Card copy
  • Mobile number (registered with Aadhar and Bank)
  • Email ID

Pension Fund Managers

Pension Fund Managers are those institutions that invest your funds for the maximum benefits by adapting to the market situations.

By default, SBI Pension Funds is selected for you but, you have an option to edit it while filling out the form to change it as per your requirement.

To choose the best pension fund manager, you can choose which offers the highest returns by evaluating the historic returns.

The following are the Pension fund manager that you can choose from-

  • LIC Pension Fund Limited
  • SBI Pension Funds Private Limited
  • HDFC Pension Management Company Limited
  • ICICI Pension Fund Management Company Limited
  • UTI Retirement Solutions Limited
  • Kotak Mahindra Pension Fund Limited
  • Reliance Capital Pension Fund Limited
  • Birla Sunlife Pension Management Limited

National Pension System Investment Strategy

While filling out the form, the NPS form has a brief section that deals with the investment strategy wherein, you have to mention the percentage of funds you provide to be invested in the account.

There are three different types of securities and investment options you will be provided with, which are as follows-

  • Government Securities- Government Bonds, Treasury Bills
  • Corporate Securities- Corporate Bonds, and other debt instruments
  • Stock Market- Stock purchases of companies

These three investment options have varied risks attached to them however, the higher the risk, the higher the returns. You can plan your investment strategy based on your age.

Government securities are the safest option, it is 100% risk-free followed by Corporate securities and the highest risk is the Stock investment.

Now, if you are young say between the age of 18-30 years then you can simply take a higher risk and go for 25% Government, & Corporate Securities each, and the rest 50% into the stock market.

From 30-50 years, you can play safe by investing 30% in Government & Corporate securities each, and the rest 40% in the Stock market.

For someone older than 50 years, you should invest the maximum in the safest instruments i.e. 40% Government, 35% Corporate securities, and the rest 25% in the Stock market.

If you follow this strategy then you can reduce your risk and at the same time get high returns. You also have an option to change your investment strategy as well as a fund manager.  

FAQ

Can I change the Scheme preference in the NPS Account?

Yes, you can change your scheme preference and investment strategy in the NPS Account. You can do that both online using the eNPS portal or offline by submitting the Form GOS-S3 in the associated Nodal Office.

How many times can an NPS subscriber change the scheme preference?

You can change your scheme preference once a year using both online and offline means.

What is the age limit for subscribing to the NPS account?

The minimum age limit for subscribing to the NPS account is 18 years and the maximum investment that you can make is up until 60 years of age.

Is it compulsory to invest in the Annuity Scheme after the maturity of your account?

Yes, it is compulsory to invest in the Annuity Scheme after the NPS account attains maturity. An annuity scheme will disburse the monthly pension amount into your bank account.

Can NRIs invest in the NPS Account?

Yes, NRIs can invest in the NPS Account but if you are a Person of Indian Origin or an Overseas Citizen of India cannot invest in the NPS Account.
The NRI investing in the NPS Account will have to remain, an Indian Citizen, if they surrender their Indian Citizenship then their NPS account will lapse and you will be provided with the accumulated funds immediately.