Investment Tips: Many options are given in front of you to invest money. One of these is the National Pension System (NPS).
The interest rate in NPS is not fixed like EPF. Through this, investments are made in stocks, which can give better returns in the long term.
Investment Tips: If you are employed, then a part of your salary goes to the Employees Provident Fund in the form of Retirement Fund. Your employer also puts in this fund as much money is deducted from your salary.
The interest rates of EPF are fixed. There are many options for investment of money in front of you. One of these is the National Pension System (NPS). The interest rate in NPS is not fixed like EPF.
Through this, investments are made in stocks, which can give better returns in the long term. You too can get higher than expected returns on your money by opting for NPS instead of EPF.
The National Pension System (NPS) plays an important role in adding funds for your retirement. Due to the option of investing in stocks, you can get higher returns in the long run. Along with high return on investment, there is also benefit in income tax.
Under Section 80C of the Income Tax Act, you can take the benefit of deduction up to Rs 1.5 lakh. Apart from this, you can take advantage of additional deduction of up to Rs 50,000 under section 80CCD(1B).
If you want higher returns on the corpus you are adding for your retirement, you can transfer your Employee Provident Fund (EPF) to the National Pension System.
How to transfer EPF to NPS?
If you want to transfer your EPF funds to NPS, then you must have an active Tier-1 account of NPS. You can open this account through the employer. If it is applicable in your organization.
Alternatively, you can open your NPS account by visiting Point of Presence (POP) or e-NPS portal. To open an NPS account, you can visit npstrust.org.in.
Apply for EPF transfer on opening of NPS account
Once your NPS account is opened, you can apply for EPF transfer to your existing employer with Employees’ Provident Fund. After application, your EPF amount will be transferred to NPS account. However, it also has a process.
When your application is received, PF Fund will start transferring the account money to PF. Thereafter, a check or draft will be issued in the name of NPS Nodal Office (in case of Government servant) or in the name of POP Collection Account.
Employer will be informed
When the transfer is done, the EPFO will inform your employer that the amount in the account has been transferred to the employee’s NPS tier account.
Thereafter the Nodal Office or POP (who would have received the draft or check from the Provident Fund) will update the money in the Tier 1 account of the employee.