Feature | Individual NPS | Corporate NPS |
Who can invest | Any Indian citizen or NRI (18–70 yrs) | Employees of NPS-registered companies |
Tax Benefits | Up to Rs. 2 lakh (80C + 80CCD(1B)) | Employee: Same as Individual Employer: Extra under 80CCD(2) |
Contributions | Voluntary | Employee + Employer |
Control | Full control by investor | Shared responsibility with employer |
Registration | Self-enrolment | Through employer |
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Types of NPS accounts
Both Corporate and Individual NPS subscribers can open:
1. Tier I Account
This is your core retirement account with tax benefits. It comes with a withdrawal lock-in until retirement (age 60), and partial withdrawal is allowed under specific conditions. On maturity, 60% of the corpus is withdrawable; the remaining 40% must be used to buy an annuity.
2. Tier II Account
This is an optional savings account. It has no lock-in, no tax benefits (unless you’re a central government employee), and works like a mutual fund with flexible withdrawals.
Quick Tip: Tier I = Retirement planning | Tier II = Extra savings
Looking for safe, tax-efficient savings outside of NPS?
Open a Bajaj Finance FD in under 5 minutes online. It’s a great way to keep your capital safe while earning higher-than-bank interest rates. Start now, with just Rs. 15,000.
Which NPS model should you choose?
Your choice depends on how you’re employed and what level of control you want.
- If you’re self-employed, freelance, or your employer doesn’t offer NPS – opt for Individual NPS.
- If you’re salaried and your company is NPS-enabled – opt for Corporate NPS to benefit from additional employer contributions and higher tax deductions.
Remember, both options invest in a mix of equity and debt to give your retirement fund the power of long-term compounding.
Also Read: NPS Returns for Tier 1 & Tier 2