HDFCsec-Learning Series-NPS

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View our presentation to understand the need for Retirement Planning and the best way to plan your Retirement Pension.

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HDFCsec-Learning Series-NPS

  1. 1. Invest today for acomfortable tomorrow NPS – A Govt. of India Initiative
  2. 2.  Planning for Retirement Pension
  3. 3. Are you saving enough for a comfortable retirement? Retirement is all about getting to do things youve always wanted to do like :  An extra vacation or a foreign holiday  Pursuing a hobby,sport or an art  Maintaining the same lifestyle you currently enjoy. But inflation eats away your purchasing power… For example: Your current age is 30yrs & monthly expenses is Rs.30000.  After 30 yrs the value of monthly expenses will be Rs.3.2 lacs, assuming inflation rate grows @ 8%. Because of this compounding effect of inflation over time, you will losesignificant value of your hard earned savings. Invest sensibly and benefit from the power of compounding to beat inflation.
  4. 4.  NPS – A Govt. of India initiative
  5. 5. What is NPS? How did it start? National Pension System (NPS) is designed to give a way for all citizens of India to contribute towards Pension & enjoy pension benefits during their old age retirement.(NPS), is managed by the Pension Fund Regulatory andDevelopment Authority (PFRDA),the apex bodyestablished by Govt. of India to regulate and develop thepension sector in India . To provide old age income Reasonable market based returns over the long term Extending old age security coverage to all citizens
  6. 6. How does NPS work?  You can subscribe to NPS by contributing periodic sums towards your pension during working life.  Regular contribution will gradually accumulate into a big corpus over the years.  When a subscriber attains 60yrs, he/she can use min 40% of corpus to buy Annuity & take the balance money out as lump sum or in installments.  A subscriber opting to exit before 60 can keep 20% of savings & invest balance in annuities.
  7. 7. Why NPS? Low Cost Investment :The fixed costs & transaction charges are lowest compared to other investment products in today’s market. It is flexible: Client can choose/switch the investment option and Pension Fund Manager and monitor their contribution & growth. Tax Benefits – Individual as well as employer’s contribution to NPS is eligible for tax exemption as per the Income Tax Act, 1961 as amended from time to time. Govt. regulated: NPS is regulated by PFRDA, with transparent investment norms and regular monitoring and performance review of fund managers by NPS Trust. Reasonable market based returns over the long term.
  8. 8. Cheapest Investment Option
  9. 9. Comparison of Charges Mutual Fund Charges* Particulars Charges Investment Amt-100000 Asset Management Charges 1.25 1250 Auditors Fee 0.15 150 Registrar Charges 0.12 120 Marketing/Dealing/Selling Expense 0.8 800 Trustee Fees 0.11 110 Custodian Fees 0.07 70 Total Charges 2.5 2500 NPS Charges* Particulars Charges Investment Amt-100000 Registration Charges 100 100 Transaction Charges 0.25% 250 Total 350 * Example NPS cost comes to around 1/6th of what a mutual fund charge No tax rebate for investment into mutual fund
  10. 10. NPS – Product features Age of Entry 18yrs up to 60yrs Types of Accounts Tier I (Non-withdrawal a/c)* Tier II (Withdrawal a/c) Contribution for Tier I • Min amt per contribution: Rs.500 • Min contribution per FY: Rs.6,000 • Min no. of contributions: 1 per yr • No upper-cap of investment Choice of any one Fund  ICICI Prudential Manager  Kotak Mahindra  Reliance Capital  SBI  UTI Choice of any 1 Investment Active – Subscriber decides on allocating option : Asset classes – his Pension wealth in 3 asset classes (Equity, Debt funds, Govt. Auto Choice – Predefined allocation based securities) on age& risk profile* HDFC securities is currently offering only Tier-I account
  11. 11. NPS – Product featuresTier I - Withdrawal After 60yrs - At least 40% of the corpus to be used to buy annuity & withdraw remaining funds in Lump-sum or deferred withdrawal. Or you can Opt for 100% annuity. Before 60 yrs – You can keep 20% of the corpus & invest the rest in annuities offered by insurance companies. Incase of Death - Option will be available to the nominee to receive 100% of NPS pension wealth in Lump sum.Tax Benefits only for Individual contribution to NPS a/c is eligible forTier-I tax deduction under Section 80C of the Income Tax Act 1961. Employer contributing up to 10% of Basic salary to the NPS account of an employee, is eligible for additional tax exemption under Sec 80CCD (2) as per the Income Tax Act, 1961.
  12. 12. NPS – Illustration*Expected returns under NPS are market driven & are subject to change from time to time. Hence, there is no guaranteed/defined amount of return.**Your monthly Pension can be higher if one increases % of annuity from 40% to max upto 100%.
  13. 13. How to open a NPS a/c? You can subscribe to NPS through designated POP (Point of Presence) i.e HDFC securities Ltd. Every subscriber of NPS will have a Permanent Retirement Account No. (PRAN), which will be a unique no. for lifetime.To open an NPS account : Download NPS subscriber application form on our website – www.hdfcsec.com (NPS section) Attach  1 Passport size photograph  1st contribution cheque in favor of “HDFC securities Ltd – NPS” Identity proof Address proof Forward the duly filled & signed application to our nearest HDFC securities branch or our representative can collect the application at your door stop.
  14. 14. Thank youFor any further queries, visit ourwebsite www.hdfcsec.com or call our customer care @39019400

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