The requirement that a single withdrawal of 60% of the total amount invested in NPS be made is about to be abolished, according to the Pension Fund Regulatory and Development Authority (PFRDA). Members will now have the option to withdraw money sequentially on a monthly, quarterly, half-annual, or yearly basis.

When an NPS member becomes 60 years old, they are permitted to take a lump sum distribution from the pension fund of up to 60% of the total. In essence, the remaining 40% is spent on annuities or pension plans. This annuity provides a pension. According to the updated regulations, PFRDA will now permit withdrawals of 60% of the capital on a monthly, quarterly, half-yearly, or annual basis up to the age of 75. By doing this, even after sporadic minor withdrawals, interest will continue to accumulate on the balance in the account.

NPS members may choose to make regular withdrawals for the following 15 years after retirement, according to the pension fund regulator PFRDA. Tier-I and Tier-II accounts will both have access to this facility. The option of starting a lump sum withdrawal before the age of 60 is also available to holders of Tier-2 accounts.

After retirement, clients must purchase pension/annuity plans from life insurance firms. Depending on their investment amount, customers get pensions on a monthly, quarterly, half-yearly, or annual basis. The interest rate is set at the moment of investment and is therefore fixed. Even on 60% of the money put in an NPS account, interest will accrue until age 75.