Non-resident Indians can invest in India through various schemes and ensure financial growth and security. Among the many schemes available, the National Pension Scheme for NRIs comes with a host of benefits that allow you to invest for the future while keeping your current finances secure.
When NRIs open an NPS account, they can invest through their NRO or NRE accounts. The National Pension Scheme for NRIs works like it does for resident citizens. Once you begin investments, the amount is invested as per your preference and managed by PFRDA-regulated fund managers.
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As a long-term, market-linked investment scheme, National Pension Scheme for NRIs gives Indians residing outside the country a way to seamlessly contribute towards building their retirement corpus.
To learn about the features and benefits of the National Pension Scheme for NRIs, how to invest, eligibility requirements, and more, read on.
Features and Benefits of NPS for NRIs
The National Pension Scheme for NRIs has several features and benefits that make your investment worthwhile. Given below are some of the top features and benefits that NRIs can enjoy:
- Investment diversification to mitigate the risk and maximise the returns
- Flexibility in allocating the funds as per risk tolerance and aligning it with your goals
- Investment options to stay invested as per your convenience
- Seamless digital investment and multiple accounts to customise the investment
- Option to choose the fund manager to ensure proper investments and control the finances
- Government-backed and PFRDA-regulated scheme to ensure security while focusing on financial growth
- Manageable minimum investment with no limit on the maximum investment
- Nominee facility to protect your loved one from any financial strain in your absence
- Partial withdrawal to meet certain financial requirements while keeping overall finances secure and growing
- Annuity purchase on maturity to inject a stable inflow of cash during retirement
Eligibility and Document Requirements
NPS is only available to NRIs and not PIOs (Persons of Indian Origin) or OCIs (Overseas Citizens of India). Given below are the eligibility criteria and documents required to open an NPS account as an NRI:
Eligibility
- You should be between the age of 18 and 60
- NRE or NRO account with empanelled banks
- Valid PAN and Aadhaar card
- Comply with KYC norms
Documents
- PAN card
- Aadhaar card
- Copy of passport
- Address proof
How to Invest in NPS as an NRI
You can invest in the National Pension Scheme for NRIs through an Aadhaar or PAN card on the official NPS-NSDL website. Follow the steps outlined below to open an NPS account as an NRI:
If using an Aadhaar card:
- Choose ‘New Registration’ under ‘Registration’ on the official website
- Select ‘Non-Resident Indian’ and choose the account type and registration choice
- Enter your Aadhar number and Passport number
- Generate OTP and enter the digits to complete the verification
- Choose the bank and submit account details
- Fill in the mandatory fields in the form
- Upload an image of your photo and signature, not mandatory
- Make the initial payment to begin your NPS investment
If using a PAN card:
- Choose ‘New Registration’ under ‘Registration’ on the official website
- Select ‘Non-Resident Indian’ and choose the account type and registration choice
- Enter your PAN and Passport number
- Select bank and submit account details
- Fill up the form and upload images
- Make the initial payment through your preferred mode
Once you complete the registration process to open an NPS account as an NRI, print the form generated and affix your photo as well as your signature. Submit the form to the CRA within 90 days to ensure that your account stays active and does not get frozen.
Important Rules About NPS for NRIs
Keep the following rules and regulations in mind to ensure that you make the most of your investment.
- Contribution
Every contribution is subject to a minimum of ₹500, and a yearly contribution is subject to a minimum of ₹6,000. There is no cap on the maximum amount you can invest.
- Withdrawal
The National Pension Scheme for NRIs is only available through Tier 1 accounts and is, therefore, subject to stringent withdrawal rules. You can also only make a partial withdrawal under certain conditions no more than three times during the tenor. The amount is subject to your investment tenor to date.
- Exit
You can exit from the NPS scheme only if you have invested for at least 10 years. If you exit before the age of 60, you will need to purchase an annuity of 80% of the funds accumulated. You can only withdraw 20% as a lump sum.
If the accumulated amount is less than ₹1 Lakh, you can make a complete withdrawal.
If exiting after turning 60, you will need to purchase an annuity of 60% of the accumulated funds. 40% will be available for a lump sum withdrawal. Complete withdrawal is permitted if the maturity amount is less than ₹2 Lakhs.
In case of death, 100% of the funds are available for a lump sum withdrawal.
Now that you know the features and benefits of the National Pension Scheme for NRIs, be sure to remember the rules and regulations of investing. Assess your current finances and your future requirements to understand the amount you need to invest.
You can even use the NPS calculator to get an estimate of the returns at the time of maturity and make informed decisions. Once you open an NPS account as an NRI, remember to make timely contributions.
