Total investment
Interest earned
Maturity amount
Min. annuity investment
The National Pension System or NPS is a measure to introduce a degree of financial stability for Indian citizens after they have retired. It was previously known as the National Pension Scheme. Anyone over the age of 60 is eligible to use the amount gathered in the pension corpus. You will need an NPS calculator to determine how much the total accumulation amounts to.
Any resident of the country who is between 18 and 60 years of age is eligible to build up a pension corpus. It is an investment and an asset after retirement. Since most people in India have private jobs with little security, they need a National Pension Scheme calculator. Pension schemes in the country are not market-linked instruments and earn sound returns.
How Does the Online NPS Calculator Work?
The online national pension scheme (NPS) return calculator asks an investor in to input to the following,
- Select the investment type i.e. monthly or yearly
- Once the investment type is selected, the monthly amount or yearly amount to be entered
- The current age of an investor, which must be more than or equal to 18 years of age
- The withdrawal % on retirement from the NPS account.
On the basis of the above details provided the calculator calculates the following,
- Total amount invested and investment period
- The wealth gained
- The monthly pension post retirement.
An estimate of the total amount invested
A subscriber of the NPS scheme irrespective of being a private employee or public employee, must make a contribution. This contribution is to be made monthly for the date of the subscription until the age of 60 years of age.
Based on the current age of the subscriber and the retirement age of 60 years of age, the NPS calculator estimates the total amount invested during the period
Total wealth gained
Upon knowing the total monthly investment amount, the calculator estimates the wealth gained or returns earned. Through the principle of the power of compounding the total amount of corpus is calculated.
The contributions towards NPS are invested in equity, debt, and government securities, hence the exact return to be earned is difficult to assess. However, you can estimate the potential returns using the NPS calculator.
Monthly pension
The NPS calculator calculates the monthly pension that the subscriber may receive on the basis of the total corpus at the time of retirement.
How can an NPS calculator help you?
Here are the ways the NPS pension calculator will assist you.
- It provides you with the amount of money which you are entitled to in the future. The pension amount is an investment and not a liability. Using an NPS calculator online is essential to determine the total corpus.
- Under the existing legislature, no individual can withdraw the entire amount of post-retirement. Besides, 40% worth of the total sum must be invested in annuities. Furthermore, the remaining 60% is subjected to taxation too. All these figures will be disclosed in detail once you start using our NPS scheme calculator.
- The calculator never errs. If you have ever tried to manually calculate the pension amounts, you will understand how tough it is. Thankfully, our NPS calculator in India will automate the entire process.
- Lastly, you can now determine the taxation regime on pension funds, the total amount you will have every month-end and several other details- all via the calculator.
Formula for calculating Pension amounts
NPS, like all pension schemes around the world, uses compounding interest to calculate returns.
The formula that the National Pension Scheme calculator India uses is:
A = P (1 + r/n) ^ nt
In the equation, the amount is A. The other variables are the following.
| P | Principal sum |
| R/r | Rate of interest per annum |
| N/n | Number of times interest compounds |
| T/t | Total tenure |
An example of how pension aggregates is essential here.
If you are 34 years old and your monthly contribution is Rs 3000, you will need to add to the pension account for 26 more years. Assuming that the rate of interest or ROI is expected at 10% every year, the following are the details the National Pension Plan calculator offers.
Total Principal invested= Rs 9.36 Lakh
Sum expected on Maturity = 44.35 Lakh
Who Can Use the NPS Calculator in India?
Any individual who is eligible to invest in NPS can use the Nation Pension Scheme (NPS) calculator in India. An investor who wants to invest in NPS and wants to get an estimate of wealth to be gained for a given investment amount can use the simple and easy to use NPS calculator
All Indian citizens over the age of 18 years but not more than 60 years are eligible to invest in the national pension scheme. All applicants to NPS must comply with the Know Your Customer (KYC) guidelines and submit relevant documents of identity proof, address proof, bank account details, etc.
The more an investor invests in NPS scheme, the more is the accumulated amount and larger is the retirement benefit out of the accumulated pension wealth due to power of compounding which makes NPS attractive for the investors
Advantages of using the National Pension Scheme calculator
These are the following:
- No more manual calculations. The right results every time.
- You will now know how much your pension amount will be. That will aid you in future planning.
- One-stop online calculation.
Frequently Asked Questions
How is interest calculated in NPS?
The part of NPS investment that goes into debt investments works similar to a recurring deposit – the principal amount invested is compounded annually to arrive at the value of the total amount (principal amount invested + returns earned over the investment tenure) when you retire, i.e. when you turn 60 years old. The interest earned by the equity component is market-linked and varies with time.
How is NPS contribution determined?
Regardless of whether they work for the government or in the private sector, NPS subscribers must contribute. From the subscription start date until the age of 60, this payment must be made on a monthly basis or on an annual basis. The amount of investment can be a minimum of ₹500 to a maximum of ₹1.5 lakh per year.
How does one modify their NPS monthly contribution?
What is the limit of the number of contributions someone can make in a year?
What is the interest rate of the NPS scheme?
Fixed interest rates are not available under the plan. During the life of the plan, NPS subscribers may choose to change their investment selections and fund managers, subject to regulatory constraints. The NPS returns are entirely based on market rates.
How can a fund manager be changed in NPS?
You can do this through Point of Presence or online. A financial year allows for one exercise of the option to switch fund managers. The option to modify your preferred scheme can be used twice in one fiscal year.
What happens to NPS following the death of the scheme holder?
The entire accumulated pension wealth of the Subscriber (100% NPS Corpus), as defined by PFRDA (Pension Fund Regulatory and Development Authority) Regulations 2015 (Exits & Withdrawals under NPS) & amendments thereto, shall be paid to the Subscriber’s Nominees or Legal heirs, as applicable, in the event of death.
What is the multiple of funds under NPS?
Three funds are waiting for subscribers from NPS. These consist of:
– The business funds
– The equities
– Government-issued securities
What are the cons or drawbacks of the NPS?
There are a few disadvantages of the NPS scheme:
– Compared to the other alternative investment/pension options, the NPS system offers a unique set of drawbacks.
– Fewer Benefits than the Older Pension Plans (For Government Employees)
– Maximum Withdrawals
– Taxes at the Time of Withdrawal
What are the tax repercussions of the NPS plan as it matures?
A subscriber may withdraw a lump sum payment of 40% of the NPS at maturity without paying taxes on it. The maximum lump sum withdrawal is 60%, and anything over 40% would be taxed.