Latest Updates
  • NPS Vatsalya sees rising awareness as government promotes early retirement savings for children under 18.
  • Tax benefits up to ₹2 lakh available under Sec 80C & 80CCD(1B) on NPS contributions.
  • PFRDA reports record growth in NPS subscribers across India.
  • NPS Vatsalya sees rising awareness as government promotes early retirement savings for children under 18.
  • Tax benefits up to ₹2 lakh available under Sec 80C & 80CCD(1B) on NPS contributions.
  • PFRDA reports record growth in NPS subscribers across India.
  • NPS Vatsalya sees rising awareness as government promotes early retirement savings for children under 18.
  • Tax benefits up to ₹2 lakh available under Sec 80C & 80CCD(1B) on NPS contributions.
  • PFRDA reports record growth in NPS subscribers across India.
  • NPS Vatsalya sees rising awareness as government promotes early retirement savings for children under 18.
  • Tax benefits up to ₹2 lakh available under Sec 80C & 80CCD(1B) on NPS contributions.
  • PFRDA reports record growth in NPS subscribers across India.
About NPS

NPS Account Types

NPS offers two distinct types of accounts — Tier I and Tier II — each designed to serve a different financial purpose. Knowing the difference helps you make informed decisions about how to save, invest, and access your money under the NPS framework.

Tier I Account — Your Core Retirement Account

The Tier I account is the primary, mandatory account under NPS and serves as the backbone of your retirement planning. It is a long-term, restricted account, meaning that withdrawals are limited until you reach the age of 60.

Key Features of Tier I

  • Mandatory for NPS enrollment Every NPS subscriber must open a Tier I account.
  • Minimum annual contribution ₹1,000 per year to keep the account active.
  • Lock-in until retirement Funds remain invested until the subscriber turns 60, promoting disciplined long-term saving.
  • Tax benefits Contributions qualify for deductions under Sections 80CCD(1), 80CCD(1B), and 80CCD(2) of the Income Tax Act.
  • Partial withdrawal Allowed after 4 years under specific circumstances such as higher education, home purchase, or critical illness.
  • Exit at maturity At age 60, up to 80% of the corpus can be withdrawn tax-free; the remaining 20% must be used to purchase an annuity.

Tier II Account — Your Flexible Savings Account

The Tier II account is a voluntary savings account linked to your existing Tier I account. It offers greater liquidity and flexibility, making it suitable for medium-term financial goals alongside long-term retirement savings.

Key Features of Tier II

  • Voluntary and flexible You can open a Tier II account only if you have an active Tier I account.
  • No lock-in period Withdraw funds at any time, for any reason.
  • No minimum balance requirement Freedom to maintain any balance as per your convenience.
  • Investment flexibility Choose from the same asset classes as Tier I — equity, corporate bonds, and government securities.

Which Account Is Right for You?

Both accounts complement each other. Tier I builds your long-term retirement corpus with tax efficiency, while Tier II acts as a flexible savings tool for shorter-term needs. Together, they provide a complete savings and investment framework under one PRAN.

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