How To Invest In National Pension Scheme

The National Pension Scheme(NPS), a retirement benefits scheme introduced by the government of India, offers savings and security post-retirement to all individuals. In this article, we will look into understanding how to invest in NPS online and the various benefits of NPS.

What Is the National Pension Scheme?  

The National Pension Scheme (NPS) is a government-sponsored pension scheme designed to provide a genuine life income for subscribers. NPS works on a contributory basis with defined benefits. 

The subscriber can make regular contributions to a pension account while they are still employed, withdraw a portion of the corpus in one lump sum, and use the remaining balance to purchase an annuity to ensure a steady income post-retirement.

Types Of NPS Accounts

The scheme is structured into two tiers:

Tier-I Account 

Tier-I account is a non-withdrawable retirement account in which the regular contributions are credited. 

The fund/portfolio manager (chosen by the subscriber) invests these funds. Tier-I account does not allow withdrawal until the subscriber reaches the age of 60.

Tier-II Account

Unlike Tier-I, a Tier-II account allows the withdrawal of funds. However, this account is only allowed when the subscriber has an active Tier-I account. Subscribers may withdraw funds as and when needed from this account as per their needs.

What Is The Eligibility Criteria For Opening A NPS Account? 

To understand how to invest in NPS, you must first know who is eligible to open an NPS account. 

How To Invest In NPS Online?

Here is how to invest in NPS online:

Benefits Of Investing In NPS Online

What Are The Tax Benefits Under NPS?

Apart from providing a secure retirement plan, NPS also benefits subscribers by helping them save on their taxes. 

1.Tax Benefits to Salaried Employees

Employees who contribute to NPS on their own are eligible for the following benefits:

If the employer is contributing to the NPS, then

2. Tax Benefits to Self-employed Individuals

Self-employed individuals who contribute to NPS are eligible for the following tax benefits:

A maximum tax deduction of 50,000 can be claimed under section 80 CCD(1B) over and above the overall ceiling of Rs. 1.50 lakh under section 80 CCE.


Investing in NPS is the right way to bring financial stability and security to your future. Consider your long-term goals and the risks involved before choosing a fund to invest in. Set aside a minimum amount every month to contribute to NPS and reach your investment goals.

How to Invest NPS Scheme Related FAQs

The monthly pension you receive from NPS is determined by various factors, including the financial assets in which you invested, the duration of your investment, and the amount of your contribution. You can use online NPS Calculators to calculate your monthly pension and tax benefits. For Tier-I, the first contribution must be a minimum of Rs. 500 while it is Rs. 250 for Tier-II.

Yes. You can add a maximum of three nominees to your NPS account.

As a subscriber, you are required to make at least one contribution per year toward your NPS account. If you are a Tier-I subscriber, you need to contribute a minimum of Rs. 1000 per year. This is not applicable for Tier-II subscribers.

No, you will not receive a contribution from the government to your NPS account. Individuals contribute to NPS accounts under the 'all citizens of India' model, while employee-employer groups contribute under the corporate model. 

No, you cannot open more than one NPS account. Moreover, NPS is transferable across professions and locations, so there is no need to open a second account.


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