Headquartered in Mumbai, Axis Bank is the third-largest private sector bank by assets and the fourth-largest firm by market capitalisation. Renowned for its diverse financial products and services, the bank also provides the National Pension System (NPS) to its customers. NPS scheme is an investment and pension scheme initiated by the Government of India to provide security and financial assistance to all Indian citizens during their old age.
In this blog, we will walk you through a detailed guide on Axis Bank NPS while highlighting all the associated details that you need to know.
What Is the Axis Bank National Pension Scheme?
The National Pension Scheme Axis Bank is an investment tool, which aids the customers in gaining market-based returns in the long run. Although an Axis Bank offering, this scheme is regulated by the Pension Fund Regulatory and Development Authority under the jurisdiction of the Ministry of Finance of the Government of India.
Axis Bank NPS Interest Rates 2024
Currently, the interest rates of NPS at Axis Bank starts at 10.25% p.a.
The NPS returns are calculated and compounded based on the market performance of the underlying assets in your NPS fund. This implies that your NPS interest rate depends on the market performance of the assets in which you have invested your funds.
Eligibility Criteria for Axis Bank National Pension Scheme
The eligibility criteria for creating an Axis Bank NPS account include the following.
- The applicant should be a resident of India, NRI or OCI cardholder.
- Applicants must not have a pre-existing NPS account.
- The applicant’s age must range between 18 and 70 years at the time of application.
- The applicant must adhere to KYC norms for compliance.
Features of Axis Bank National Pension Scheme
Here are the salient features of the NPS in Axis Bank that you should be aware of before applying.
- There are 2 types of accounts available under the Axis Bank NPS scheme, Tier I and Tier II. A Tier I account is compulsory to subscribe to the NPS scheme while Tier II accounts are voluntary.
- Once your Axis Bank NPS account gets opened, you need to regularly invest in the scheme until you reach the age of 70 years.
- To open an NPS account in Axis Bank, you need to invest a minimum deposit. The minimum deposit amount required for opening a Tier I account is ₹500 and ₹1,000 for a Tier II account. After opening, you need to deposit at least ₹1,000 in Tier I, and ₹250 in Tier II accounts respectively in every financial year.
- You can access two modes for investments at the time of opening your NPS account which include Active Choice and Auto Choice. In the case of Active Choice, you can invest in any one of the given funds while in the other case, you need to pre-determine your investments as per your risk preference.
- Different NPS fund managers are available from which you have to choose one for your NPS investments.
Tax Benefits For Axis Bank National Pension Scheme
Investments in your NPS accounts will let you earn the following tax benefits.
- If you are investing up to ₹1.5 lakhs, such investment is deductible from your taxable income under Section 80 CCD (1).
- Account holders can also invest an amount of ₹50,000 to claim an additional deduction under Section 80 CCD (1B).
- You can further partially withdraw your NPS investment after 3 years, which will completely be exempted from taxation.
- You will also be able to withdraw 60% of the corpus in a lump sum on the maturity of the scheme. This amount will also be tax-free. The tax deductions will take place when you receive your annuity income upon maturity.
Taking into account the above-mentioned tax benefits provided by NPS in Axis Bank, you can potentially achieve significant savings by reducing your tax liabilities.
How to Invest in the Axis Bank NPS Scheme?
There are two ways to invest in your NPS scheme. For this, you have to undergo the Axis Bank NPS account opening process, which includes both online and offline methods, as discussed below.
Offline Account Opening
To open your Axis Bank NPS account, you can consider the following steps.
- Step 1: Visit your nearest Axis Bank branch. You can visit any of your nearest branches as they all serve as Point of Presence Service Providers to open your NPS account.
- Step 2: Submit your application with a duly filled Axis Bank NPS subscriber registration form.
- Step 3: Provide your KYC documents for the verification process.
Online Account Opening
You can also open your account online by following the given below step-by-step guide.
- Step 1: Visit the official Axis Bank website.
- Step 2: Choose ‘NPS’ under ‘Apply Now’.
- Step 3: Provide the required details such as your particulars, contact information, bank details, nominee and other details as displayed in the online form.
- Step 4: Upload your KYC documents and make your NPS deposits online.
After the verification, your Axis Bank NPS account will be opened.
Documents Required for Axis Bank NPS Scheme
You must provide the following KYC documents in the process of registration for your NPS account with Axis.
- Proof of Age and Identity
- Aadhaar Card
- Proof of Address
- PAN Card
- Copy of cancelled cheque
- Bank passbook
- Scanned signature for online Axis Bank NPS registration
Things to Know About Axis Bank NPS
Here are some of the key points that you must keep in mind before investing in your Axis Bank NPS account.
- Regulated by the PFRDA, the NPS scheme is a reliable investment avenue ensuring income security in your old age.
- You can nominate two different beneficiaries, each for your Tier I and Tier II accounts.
- There are exclusive tax benefits associated with NPS accounts, providing an opportunity for additional savings.
Final Word
Considering the benefits of the NPS scheme, investing in your Axis Bank NPS account will let you grow your savings and generate revenue as pensions. This investment avenue is government-backed and has various benefits including high-yielding interest for you to gain in the long run.
Frequently Asked Questions
Every user of NPS is provided with a 12-digit unique number referred to as the Permanent Retirement Account Number or PRAN at the time of account opening.
Yes, you can switch your asset allocation pattern under Active Choice twice in a financial year as a subscriber of an Axis Bank NPS account.
No, you cannot open joint Axis NPS accounts as they can be opened only in an individual capacity. Moreover, you cannot open or operate an NPS account on behalf of a Hindu Undivided Family or HUF.
No, you cannot create multiple NPS accounts under the provisions of the National Pension Scheme.
Disclaimer
This article is solely for educational purposes. Stable Money doesn't take any responsibility for the information or claims made in the blog.
