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Easy Guide to Withdraw NPS Fund in 2021

NPS (National Pension Scheme) is one of the most popular pension schemes in India as it is a government-backed scheme. Under this scheme, you can invest in security funds, equity funds of lower risks, or any other instrument that promises substantial returns. Though you are supposed to keep depositing money in NPS till retirement, you can withdraw it partially in case of emergencies. 

The Government of India has even allowed partial withdrawal of NPS funds for the treatment of Coronavirus or any life-threatening disease.

The following rules apply to the partial withdrawal of NPS funds:

  • A partial withdrawal is allowed only in cases of medical emergencies, life-threatening diseases, or any other major events that require financial assistance. 
  • A partial withdrawal can be made only once every five years. 
  • You will have to contribute at least 3 years towards NPS to be eligible for a partial withdrawal. 
  • Here partial withdrawal refers to the withdrawal of only 25% of the amount that you have deposited in your NPS account to date. This does not include the interest amount that your accumulated corpus has earned over the period. 
  • If you or any of your family members are diagnosed with a critical illness then the rule of a 5-year gap between two partial withdrawals will not be applicable. 

The below process will guide you on how to withdraw your NPS funds online from your Tier-1 account:

  • Firstly, you will need to visit the official website of NSDL and log in with your user ID and password. 
  • After logging in, you will have to click on the ‘Partial Withdrawal’ option that will be present under the ‘Withdrawal’ tab.
  • Now, you will be directed to a new page where you will have to submit your PRAN (Permanent Retirement Account Number), and then a form will be generated. You will have to submit this form along with the required documents to the Nodal Officer. 
  • Upon successful processing, you will be able to see your details and the amount that can be withdrawn from your NPS account. You can enter any percentage as per your requirements but the percentage cannot exceed 25% of your NPS contribution. 
  • You will also need to specify the exact reason for NPS fund withdrawal. The system will generate a new form with all the details which you will need to submit along with a valid medical certificate for completing this process. Upon successful confirmation, the money will be credited to your account. 

Thus, you have seen how long and tiring this process can be. If you want to apply for an investment plan that offers easy liquidity options along with high returns then you can check the corporate FD plan offered by Bajaj Finance. Here are some features of this FD scheme that can prove to be crucial for earning substantial returns:

High-Interest Rate 

The FD interest rate of 7.25% is one of the highest FD rates in the market today. It will ensure that your deposits grow at a rate good enough to satisfy your financial goals. 

Suppose that you invest Rs. 20,00,000 in its FD plan for 3 years. The FD value that you will get at maturity is mentioned in the below table:

FD planAmountTenorRate of Interest Interest gainsMaturity amount
Bajaj Finance FDRs. 20,00,0003 years7.25%Rs. 4,67,300Rs. 24,67,300

As per the NPS withdrawal policy, you can withdraw only 25% of the deposited amount and that also after the completion of 3 years. However, here you can earn a much higher amount along with interest. Moreover, a chunk of these returns can be invested in another fixed deposit plan after taking the amount needed for your immediate expenses. 

Easy withdrawal options 

Unlike NPS, this FD scheme offered by Bajaj Finance provides easy withdrawal options. You can withdraw your deposits by paying a minimum penalty upon completion of 3 months only. 

Also, you need not withdraw your deposits as you will get a loan up to 75% of your FD value to fund your emergency requirements. 

Secure option 

Like NPS, Bajaj Finance FD plans are also secure as they have been recognized as a stable investment platform by credit rating agencies like ICRA and CRISIL. Also, a 0.10% additional FD rate is offered if you prefer the online mode of investment, and a 0.25% higher FD rate is provided if you are above 60. This means that you can utilize this FD scheme to take care of your finances post-retirement as well.

NPS is a highly popular pension scheme as it provides considerable returns and safety of the invested amount. If you keep the NPS benefits aside you will see that its withdrawal policies are way too long and complicated. If you need an investment plan that is more lenient when it comes to premature withdrawals and provides the same kind of returns that an NPS provides then you can think of investing in a Bajaj Finance FD.

The reason for this is its high FD rate and convenient withdrawal procedure. Moreover, you get a 0.10% additional FD rate on utilizing its online FD form and senior citizens are eligible for a 0.25% higher interest rate. Therefore, it is a suitable investment scheme for both the pre and post-retirement periods. 

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