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NPS for Housewife

By enrolling in the National Pension Scheme, housewives can ensure a secure retirement and financial independence. Read ahead to know all about NPS.

  • 12,667 Views | Updated on: Jun 13, 2024

One of the most popular retirement plans that we have in India is the National Pension Scheme, also known as NPS.

Retirement plans help us to live with dignity and without compromising our standards, and pension schemes provide an opportunity to invest and accumulate enough savings.

In this article, we will discuss why retirement plans like NPS are important for housewives, how to open an NPS account for housewives, and how the NPS for wives plays a crucial role after the death of the husband.

What is the National Pension Scheme?

The National Pension Scheme is a pension system that any citizen of the Indian subcontinent can opt for and is open to all residents of India. It is controlled by the Pension Fund Regulatory and Development Authority of India (PFRDA). The money that the subscribers/investors contribute is further invested in market-linked financial instruments like debts and equities. The final amount of the NPS depends on the performance of these assets.

Generally, NPS has an applicable interest rate ranging between 12% to 14% on contributions made. Anyone who is in the age group of 18-60 years and is an Indian citizen can open an NPS account. So if you are looking to open an NPS account for your wife, doing it at the earliest is best for your post-retirement goals.

The NPS scheme for housewife will not only help you get a dual income in your presence but will also earn an income for your wife in your absence in addition to other benefits that she is entitled to post your demise. Additionally, the NPS allows a partial withdrawal of up to 25% of the total accumulated fund. This will help you in using the NPS funds for emergency purposes too.

Types of National Pension Schemes for housewives

it is essential to secure your future financially, and this is where the National Pension Schemes come into the picture. The Indian government has introduced various pension schemes that cater to the needs of different sections of society, including housewives. Here are the two most popular pension schemes in India - the National Pension Scheme (NPS) and Atal Pension Yojana (APY).

National Pension Scheme (NPS)

The National Pension Scheme (NPS) is a voluntary, defined contribution retirement savings scheme for all Indian citizens between the ages of 18 and 60. The scheme allows you to contribute a certain percentage of your salary every month, and this amount is invested in various asset classes such as equity, debt, and government bonds.

Atal Pension Yojana (APY)

Atal Pension Yojana (APY) is a government-backed pension scheme aimed at providing social security to the unorganized sector. The program offers a guaranteed pension of ₹1,000 to ₹5,000 per month after the age of 60 and is open to all citizens between the ages of 18 and 40.

The scheme requires a monthly contribution, and the contribution amount depends on the age of the subscriber and the pension amount chosen. The contribution can be made through the subscriber’s savings bank account or post office savings account. The scheme offers tax benefits under Section 80CCD of the Income Tax Act, 1961.

Benefits of National Pension Schemes for Housewives

Anyone can opt for an NPS, given that they fulfill the eligibility criteria. However, the NPS scheme for housewives is exceptionally beneficial. Here are some of the benefits it offers:

Transparency

Being controlled by a government body, the NPS is a transparent scheme with a cost-effective financial infrastructure. In NPS, the contributors can get updates on the value of investment daily.

Ease Of Access And Use

Anyone eligible to open an NPS account has to visit the nodal officer of their area, open an NPS account and receive a PRAN (Permanent Retirement Account Number).

Portability

The PRAN number that is allocated while opening an NPS account is unique and is portable. So if you change a city or an office you can easily get your PRAN transferred and keep saving in the same account.

Regulated By Government

The NPS scheme is regulated by the Pension Fund Regulatory and Development Authority (PFRDA), and you can check all the required details easily.

Trustworthy/ Low Risk

Being a government-regulated scheme, the chances of loss is minimal. Thus, it is a secure option. You can therefore rely on an NPS account to serve her financial needs in your absence.

How to enroll in National Pension Schemes for housewives?

Enrolling in a National Pension Scheme for housewives is a simple and straightforward process. Here are the steps.

Step 1: Choose a Pension Scheme

The first step is to choose the National Pension Scheme that suits your needs. The government of India has two pension schemes for individuals - Atal Pension Yojana (APY) and National Pension System (NPS). Both schemes are designed to provide financial security to individuals after retirement.

APY is a pension scheme aimed at the unorganized sector, including housewives. It is a guaranteed pension scheme with a minimum monthly pension of ₹1,000 to ₹5,000. On the other hand, NPS is a market-linked pension scheme that allows you to choose your investment options.

Step 2: Eligibility

To enroll in these schemes, you must be an Indian citizen and between the age of 18 and 60 years. You must have a savings bank account and a valid Aadhaar card.

Step 3: Enrollment Process

To enroll in APY or NPS, you can visit any bank or post office where the scheme is available. You can also enroll online through the scheme’s official website. For APY, you will have to fill out a registration form and provide your Aadhaar number, savings bank account details, and nominee details. For NPS, you can register online and choose your investment options.

Step 4: Contribution

Once you have enrolled in the scheme, you will have to contribute a fixed amount every month. The contribution amount for APY depends on the age at which you enroll, and for NPS, you can choose your contribution amount and frequency.

Step 5: Benefits

The benefits of National Pension Schemes are immense. You can enjoy a guaranteed monthly pension with APY or a market-linked pension with NPS. You can also avail tax benefits under Section 80CCD of the Income Tax Act.

Wrapping Up

In conclusion, enrolling in national pension schemes is an essential step for housewives to secure their future and ensure financial stability during retirement. By understanding the eligibility criteria and the different schemes available, housewives can choose the right pension plan that suits their financial goals and requirements. The process of enrolling in these schemes is straightforward and can be done online or through a nearby bank or post office. Housewives must prioritize their retirement savings and take advantage of government-supported pension plans to ensure a comfortable and stress-free life after retirement.

Key takeaways

  • NPS is a pension system that any citizen of the Indian subcontinent can opt for. It is open to all residents of India.
  • NPS has an applicable interest rate ranging between 12% to 14% on contributions made.
  • The National Pension Scheme (NPS) is a voluntary, defined contribution retirement savings scheme for all Indian citizens between the ages of 18 and 60.
  • NPS is a transparent scheme with a cost-effective financial infrastructure.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors