NPS Withdrawals: Your Guide to Retirement and Early Access

1. When can I withdraw money from my NPS account?

• Partial Withdrawal: After 3 years, up to 25% of your contributions for specific reasons (illness, children's education/marriage, buying property, starting a business) up to 3 times.
• Premature Withdrawal: After 5 years (or 3 years if joined after 60), up to 20% lump sum, 80% annuity. Full lump sum if the corpus is less than ₹2.5 lakh.
• Normal Withdrawal: At 60 (or after 3 years if joined after 60), up to 60% lump sum, 40% annuity. Full lump-sum if corpus is less than ₹5 lakh.

You can also:

• Stay in NPS until 75 or leave anytime after 60.
• Defer your lump sum (up to 60% of the corpus) until age 75 or take it in instalments till age 75.
• Defer purchasing an annuity (with at least 40% of corpus) until age 75.

In case of death, the nominee/legal heir receives the entire corpus. They can also choose to purchase an annuity.

2. What if I don't want to exit NPS at 60?

Your account automatically continues until 75, but you can exit anytime after 60.  Exit is mandatory at 75.

3. What are the valid reasons for partial withdrawal?

• Higher education of children
• Marriage of children
• Purchase/construction of residential property
• Treatment of specified illnesses
• Disability (more than 75%)
• Skill development/reskilling
• Starting a venture/startup

4. How do I request a withdrawal from my NPS account?

• Online: Login to your NPS account.
• Offline: Submit a physical form with required documents to your PoP.

5. How do I choose an Annuity Service Provider (ASP) and an annuity plan?

Below mentioned Fourteen ASPs are empanelled with PFRDA.  Annuity plan options include: life annuity, annuity with guaranteed period, increasing annuity, annuity with spouse benefit, and annuity with return of purchase price.  Compare plans and ASPs online or by checking individual ASP websites.

• SBI Life Insurance Co. Ltd
• Life Insurance Corporation of India
• Star Union Dai-ichi Life Insurance Co. Ltd
• ICICI Prudential Life Insurance Co. Ltd
• HDFC Life Insurance Co Ltd.
• IndiaFirst Life Insurance Co Ltd
• Edelweiss Tokio Life Insurance Co. Ltd
• Bajaj Allianz Life Insurance Co Ltd.
• Canara HSBC Oriental bank of Commerce Life Insurance co Ltd.
• Kotak Mahindra Life Insurance Co Ltd.
• Tata AIA Life Insurance Company Limited
• Max Life Insurance Company Limited
• PNB Metlife India Insurance Company Limited
• Aditya Birla SunLife Insurance Company Limited

Annuity plan options include:

• Lifetime annuity at a fixed rate.
• Annuity for a guaranteed period (5, 10, 15, or 20 years) and then for life.
• Increasing annuity growing at 3% per year.
• Lifetime annuity with 50% continuing to spouse after death.
• Lifetime annuity with 100% continuing to spouse after death.
• Lifetime annuity with purchase price returned upon death.
• Lifetime annuity with 100% continuing to spouse and purchase price returned after spouse's death.

6. How will I receive my pension?

You will receive your pension according to the annuity plan purchased from your chosen ASP (Insurance Company).

7. What are the withdrawal rules for a Tier II account?

Tier II withdrawals are unrestricted. You can also transfer funds from Tier II to Tier I (one-way only). If your Tier I account is closed, the Tier II balance will be transferred to your bank account.

- Story by Bruhadeeswaran R.