How to Withdraw NPS: A Simple Guide for Subscribers

Many retirees opt for the National Pension Scheme (NPS) as it is one of the most beneficial ways to start long-term retirement savings. But, there may come a time where you may need to withdraw your savings.

Understanding how to withdraw NPS helps you make these withdrawals correctly and plan them optimally. This also helps avoid any confusion during emergency withdrawals. Let’s break it down.

When Can You Withdraw from NPS?

There are three primary situations in which most people withdraw from NPS:

• At retirement, which is usually at age 60
• Partial withdrawal before retirement
• Premature exit before age 60

How to Withdraw NPS

Here is how to withdraw NPS in the three situations listed above:

At Retirement

You can withdraw up to 60% of the NPS corpus as a lump sum. Note that at least 40% of this lump sum must be used to buy an annuity or pension. The lump sum portion is usually tax-free, based on certain conditions.

Before Retirement (Partial Withdrawal)

Partial withdrawals are allowed after 3 years of joining an NPS scheme for specific reasons like education, medical needs, house purchase. In this case, you can withdraw up to 25% of your own contributions maximum of 3 times during the NPS tenure.

Before Age 60 (Premature Exit)

If you exit NPS before 60, up to 20% can be withdrawn as a lump sum, while 80% must be used to purchase an annuity or pension.

 

How to Withdraw NPS: Online vs Offline

There are two methods you can use to withdraw NPS. Here are both the processes:

Online Method

1. Log in to the eNPS portal
2. Select the withdrawal option
3. Fill in your bank and nominee details
4. Upload required documents
5. Submit the request

Offline Method

In case you can’t opt for the online method:

• Visit your Point of Presence (PoP)
• Submit withdrawal forms
• Provide your identity and bank details

Documents Required

Here are some documents you should keep handy when withdrawing your NPS:

• PRAN card
• Identity proof
• Cancelled cheque
• Bank account details

Takeaways

Knowing how to withdraw NPS helps you gain access to your retirement savings according to NPS rules. Using the right method and process makes sure you make no mistakes and avoid confusion.