“The biggest part of our digital transformation is changing the way we think.” 

Simeon Preston

You used to hear a phrase, ‘The world is shrinking’, which is metaphorically true, thanks to digitalization. Everything is at our fingertips; you just need to tap, and it is done. In today’s fast-paced world, one thing that is done regularly is planning. People start planning their future; they care more about their savings, investments, and expenses. They look for different options in funds and investment programs to grow their wealth, and even youngsters start planning for their retirement, which is eventually a good thing.

So, how would you perceive this fact? Do you also like to plan and create a corpus for your retirement? If the answer is ‘yes’, then this blog is for you!

You must have heard or read about the National Pension System online. But you don’t know where to start or how to apply for it. Let’s understand the procedure.

How to apply for a National Pension System account online

While applying for an NPS account online, or eNPS, there is a similar pattern. Either you visit NPS to register online and link your mobile number, Aadhaar, and Permanent Account Number (PAN) with your NPS account.

Secondly, you can also visit KFin Technologies website to enroll for an NPS online account. Let’s understand this one by one:

Step 1: Visit https://www.nps.kfintech.com/

Step 2: Click on ‘Join NPS’.

Step 3: You will be redirected to a new page.

Step 5: Enter the following details:

• Your full name
• Your date of birth
• Mobile number
• Your PAN number
• Email ID
• Application type
• Resident type
• Accept the terms and conditions
• Click on ‘Create an account, and you will be redirected to the NPS page

NPS comes with many benefits; let’s have a look at its features briefly.

Features

• 40% of the NPS corpus is tax-free at maturity, while the remaining 60% is taxed
• An annuity purchase is made with tax-free money
• If you take out 40% of your corpus and put the other 60% into an annuity, there won’t be any taxes due on the remaining 20%
• At least 40% of the corpus must be used to purchase an annuity
• Withdrawals made in one lump sum are taxed
• Section 80(C) of the Income Tax Act has increased the annual total tax exemption for NPS from ₹1.5 lakh to ₹2 lakh
• The tax treatment of the annuity pension will depend on the tax bracket of the account holder

Conclusion

As we live in a digital era, it is always good to proactively strategize for the future. When it is easy, hassle-free, and reliable, then we should not shy away from creating a corpus for our future.

Have you ever been to an eye specialist? If it is a yes, then you know from experience how he checks your eyesight. Then you choose the right spectacles. But what if you are confused between two frames?

The same situation applies when you choose a retirement plan. National Pension System or PPF: which is best for you? Before you draw any conclusions, it’s always better to view and compare them. Let’s discuss the National Pension System first.

Understanding the frame of the National Pension System

The National Pension System, a well-established government-sponsored pension program, offers a wide range of benefits to employees across various sectors, excluding the armed forces. This inclusive initiative extends its reach to individuals working in the public, private, and unorganised sectors.

Within this particular scheme, individuals who possess an account have the opportunity to consistently allocate funds towards a pension account throughout the duration of their employment. After reaching retirement age, individuals who hold accounts have the opportunity to access a specific portion of their accumulated funds as a lump sum payment. The remaining balance can then be utilised as a regular pension, ensuring a steady income throughout their retirement years. ​​

While PPF (Public Provident Fund) is also backed by the government, it has a long-term investment perspective. In order to achieve optimal outcomes, it is important to maintain a long-term commitment to the scheme for a period of 15 years.

But what is the difference between NPS and PPF? Before you finalise the right frame or colour of it, you need to be clear about your face type—is it long, oval, round, etc.? Then,  will it suit your personality? You cannot keep changing the frames every single day. Then, you might also think of a particular colour for the frame.

So, let’s discuss: who can invest in NPS? The NPS is open to any citizen of India who is between 18 and 60 years old on the date of submission of their application. While in PPF, the account holder would need to comply with the Know Your Customer (KYC) norms and should not be an undischarged insolvent or of an unsound mind.

When selecting the right frame, make sure the frames fit at the bridge of your nose. This is one of the most crucial factors to consider when choosing frames for your lifestyle. Your glasses will stay on better as a result. You need to understand the features of a frame before choosing the final one. What about the features of NPS and PPF? Let’s discuss the same briefly.

Key Features of NPS compared to PPF

Who can invest in NPS? An NPS account can be opened by Indian citizens above 18 years of age and less than 60 years of age, while in PPF, any citizen of India can open a PPF account. But in NPS, an NRI too can open an account; this is not the case with PPF.

Interest rates: in NPS, you’ll get around 12–14% interest, while in PPF, you only get around 7-8%.

Maturity period: In 15 years, a PPF account matures. After 15 years, this term may also be extended by a block of five years with 7-8 or without further contributions. The maturity period is flexible. The NPS account allows for contributions up until the age of 60, with the option to continue investing until the age of 70.

Investment Limited: The NPS requires a minimum contribution of ₹6,000. There is no cap on contributions as long as they don’t go over 10% of your gross annual income or 10% of your gross total income if you work for yourself. Whereas in PPF, you can contribute a minimum of ₹500 per year, with a ₹1,50,000 limit on the total. There can be a maximum of 12 contributions per year.

Tax Benefits: Only ₹1.5 lakh under Section 80CCD(1) of the Income Tax Act and an additional ₹50,000 under Section 80CCD(2), for a maximum of ₹2 lakh, are eligible for tax benefits under NPS. Under Section 80C, every PPF deposit is tax-deductible.

Conclusion

If you know your face shape, choose the right colours, take your lifestyle into account, and go with what makes you feel the happiest and most comfortable, finding the right frames will be simple. The same implies choosing between NPS and PPF. You need to know the benefits of each option before investing.