NPS Premature Withdrawal Rules – Tier I & II

National Pension Scheme (NPS) Premature Withdrawal Rules

The recommendations of a house panel on the new pension scheme aims at making NPS investor friendly. It intends to help private workers in building a corpus of funds for retirement with reasonable returns.

Here are the basic rules for NPS premature withdrawal:

1) Upto 25% of the contribution to be allowed for partial withdrawal

2) Investors to be allowed three such withdrawals

3) Another important rules for NPS withdrawal is that the minimum contribution of 10 years is needed to be eligible for withdrawal facility

4) Gap of 5 years between withdrawals but not in case of critical illnesses

5) Withdrawal to be allowed for treatment of serious illnesses for the person investing in NPS, spouse and children

6) NPS withdrawals can also be made for higher education of children’s and their marriage

7) For buying and constructing your first house, you can withdraw money from national pension scheme account

Withdrawal Conditions Under Tier – I & II Account

Although there are multiple options through which you can open an NPS account. The two most important ones are Tier – I & II. Following are the NPS withdrawal rules for these two accounts:

1) Tier-I Withdrawal: Prior to 2011, the lock-in period was till the age of 60. But after reviewing the pension fund regulatory and development authority bill, the committee agreed on enabling subscribers for premature withdrawals in the form of repayable advance but only under the condition that – the investor completes 15 years of service. Investor can also withdraw up to 50% of contribution after he/she serves minimum 25 years of service. Withdrawals can be done when faced with unforeseen life events such as critical illnesses and emergencies.

2) Tier-II Withdrawal:  Unlimited withdrawals are permissible for an investor who invests in Tier-II account which acts like a normal savings bank account. However the process of withdrawing the money is tiresome. The agencies (called POP – Points of Presence) through which the requests is to be made are very less in numbers and everything is to be done offline resulting in investors to travel longer distances.

18 thoughts on “NPS Premature Withdrawal Rules – Tier I & II

  1. hi
    can u please guide me the detailed
    procedure of withdrawal of NPS Tier
    1 account if the investor is dead.
    i’ve no idea of the account no. nor
    I know about the nominee.

  2. I have been appointed as Constable in RPF in jan 2005and was removed from service of constable in Railway Protection Force in railway . My contribution has been made upto 02/2010. I wish to withdraw my contributed amount. So how lll done it.

  3. i want to withdraw from NPS joint in scheme for last three years. Amt required for purchase of flat. Is is permissable ? if so what is procedure.

  4. i want to withdrawal money from nsdl nps tier 1 for buying my own house , i m a central government employee since 2008 .Please tell me all possible ways.or also tell me to exit from this scheme if it is not providing my money back in need.thanks in anticipation.

    • Bhawna its not possible untill you contribute for 10 yrs i.e till 2018. Also you cnt exit the NPS Scheme till you quit the job.

  5. R/s Sir, I m central govt employee. since 2004.so I know that I want to withdrawal money from Nsdl.pls tell me about all possible way.thank you.

  6. Sir, I had been employed with a private sector bank from 2012 and my amount was deposited with NPS. Now I am employed with another company and have opted regular PF. Please let me know how to withdraw my amount from NPS

  7. What is the procedure of pension and withdrawal in death case of NPS subscriber? kindly provide the stepwise guidance at the earliest.

  8. SIR i want to withdrawal money from nsdl nps tier 1 for buying my own house , i m a central government employee since 2007 .Please tell me all possible ways.or also tell me to exit from this scheme if it is not providing my money back in need.thanks in anticipation.
    AND EXPLAIN TIER II

  9. I have been appointed as MTS in 2006. I want to draw some amount for construction of my first own house. Please inform me how much amount I can withdraw.

  10. I was working in a nationalized bank. Due to my family problems I resigned from that. Now I m working in a Non-NPS Institution.Can I get my contributed amount in NPS back.

  11. Can u plz change my NPS account to old pension scheme. I hav complete 10 years of my servicee. We r like a beggar knw ,having money in account we have to beg with the bank. Who r u to decide.

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