NPS Tier II Default Scheme: Flexibility, easy withdrawals, and no minimum balance; here's what makes it a smart choice
The NPS Tier II Default Scheme was launched by the PFRDA, exclusively for subscribers from the government sector, along with a range of benefits.
The Pension Fund Regulatory and Development Authority (PFRDA) has launched the NPS Tier II Default Scheme exclusively for government sector employees. In a circular, the PFRDA stated that the scheme will also come with the additional benefit option with flexibility and convenience aligning with the unique requirements. It also said that the government sector subscribers can continue with the default scheme under Tier II even after their shifting account to another sector. The scheme has been introduced in a bid to take a significant step forward in catering to the diverse financial aspirations of the Government Sector Subscribers.
Read on to know the benefits of the NPS Tier II Default Scheme to understand why it is a smart choice.
Benefits of the NPS Tier II Default Scheme
Greater Flexibility: The scheme provides greater flexibility to subscribers as there is no mandatory annual contribution requirement. One can open an account by paying the minimum subscription amount and also pay as much as she wants to contribute under Tier II.
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Easy withdrawals: Unlike other investment options, subscribers can withdraw funds from their Tier II accounts at any point in time. With this option, subscribers can access their savings at the time of sudden needs.
Seamless transfer: Subscribers can also move their funds to their primary pension account (Tier I) at any point in time.
No need to maintain a Minimum Balance: Subscribers under the NPS Tier II Default Scheme don't need to maintain a minimum balance in their Tier II account.
Nomination option: Subscribers under the NPS Tier II Default Scheme can nominate beneficiaries for Tier II accounts separately if needed.
Default Investment Scheme extended: With the introduction of the scheme for government sector subscribers, the facility of the Default Investment Scheme of Tier I has been also extended to the Tier Il accounts. This will help subscribers to have a similar experience, without having to choose a separate plan.
Easy to onboard: The process to access the scheme is simple as subscribers willing to join Tier II and opt for the Default Scheme need to provide consent or a request to the CRA through the associated nodal office.
Keeping in view all the benefits of the NPS Tier II Default Scheme, willing subscribers associated with Protean CRA can complete the account activation process on the Protean e-NPS website.