Union Bank of India NPS

Home / Glossary / Saving Schemes / Union Bank of India NPS

Introduction

The Union Bank of India National Pension Scheme (NPS) is a government-backed retirement savings program regulated by the Pension Fund Regulatory and Development Authority (PFRDA). Among the various banks offering NPS services, Union Bank of India (UBI) plays a pivotal role in providing access to this long-term investment option for Indian citizens looking to build a retirement corpus.

This guide will walk you through everything you need to know about the Union Bank of India NPS, its eligibility criteria, benefits, tax perks, application process, and much more.

What is the National Pension Scheme?

The National Pension Scheme (NPS) is a market-linked voluntary retirement savings initiative introduced by the Government of India to help individuals plan for their retirement in a structured manner. It encourages the habit of saving for the future by making regular investments, which are then managed by professional fund managers.

NPS accounts are available to all Indian citizens aged 18–70 years. The scheme comes with two types of accounts:

Tier I: A mandatory, long-term retirement account with restricted withdrawals.
Tier II: A voluntary savings account with the flexibility of withdrawals.

Union Bank of India NPS: Overview

Union Bank of India (UBI) is one of the registered Points of Presence (PoPs) authorized to provide NPS-related services to individuals. UBI facilitates the opening, contribution, and management of NPS accounts via its wide branch network and digital banking services.

The UBI NPS Account allows subscribers to enjoy the dual advantage of wealth creation and financial security post-retirement.

You may also want to know Pradhan Mantri Awaas Yojana Gramin

Eligibility Criteria for Opening a UBI NPS Account

To open a National Pension Scheme account through Union Bank of India, applicants must meet the following eligibility conditions:

Must be an Indian citizen (resident or non-resident).
Age should be between 18 and 70 years at the time of enrollment.
Must comply with Know Your Customer (KYC) norms.
Should not already hold a pre-existing NPS account (for Tier I).

Why Invest in the Union Bank of India NPS Scheme?

There are several compelling reasons to invest in the NPS scheme in Union Bank of India:

1. Regular Investments Create a Sizeable Corpus

Through monthly or annual contributions, individuals can build a significant retirement fund over time.

2. You Get Tax Benefits

NPS offers tax deductions under:

Section 80CCD(1): Up to INR 1.5 lakh (within Section 80C limit).
Section 80CCD(1B): An additional INR 50,000 exclusively for NPS investments.
Section 80CCD(2): Employer’s contribution is deductible (up to 10% of basic + DA).

3. The Investments Are Market-linked

Subscribers can choose among equity, government bonds, and corporate debt, giving higher potential returns than traditional pension plans.

4. Different Pension Payment Choices

Upon retirement (at age 60 or beyond), the subscriber can:

Withdraw up to 60% of the corpus as a lump sum.
Invest the remaining 40% in annuity plans for regular pension payments.

You may also want to know Pradhan Mantri Krishi Sinchai Yojana

Features of Union Bank of India NPS Account

Flexibility: Choose contribution amounts and investment options.
Portability: The account can be managed and accessed across India.
Transparency: Online access to transaction history and fund performance.
Professional Management: Fund managers appointed by PFRDA oversee investments.
Low Cost: NPS has one of the lowest fund management charges in the market.

How to Open a UBI NPS Account

You can open a UBI NPS account through two primary channels:

1. Offline Process:

Visit the nearest Union Bank of India branch.
Fill out the NPS Application Form (available at the branch or on the website).
Submit KYC documents such as Aadhaar, PAN, and address proof.
Make the initial contribution (minimum INR 500 for Tier I, INR 1,000 annually).
Receive the Permanent Retirement Account Number (PRAN).

2. Online Process:

Visit the Union Bank of India NPS portal.
Select the NPS section.
Complete the online registration with Aadhaar/PAN.
Upload scanned copies of documents.
Make the payment.
PRAN is generated digitally and can be used for login.

Types of NPS Accounts

Tier I Account

Mandatory for availing tax benefits.
Restricted withdrawals before retirement.
Minimum contribution: INR 1,000 per annum.

Tier II Account

Optional, flexible withdrawal allowed.
No tax benefits.
Minimum contribution: INR 250 per transaction.

Investment Options Available

Union Bank of India NPS subscribers can select from the following asset classes:

Equity (E): Higher risk, high return potential.
Corporate Bonds (C): Moderate risk and stable returns.
Government Bonds (G): Low risk.
Alternative Investment Funds (AIF): Limited option for high net-worth individuals.

You can either choose the Auto Choice (life-cycle fund allocation) or Active Choice (manually allocate percentages).

Documents Required for Opening a UBI NPS Account

PAN Card
Aadhaar Card
Passport-sized Photograph
Canceled Cheque
Proof of Address (if different from Aadhaar)

Contribution Guidelines

Minimum Contribution (Tier I): INR 500 per transaction or INR 1,000 annually
Minimum Contribution (Tier II): INR 250 per transaction
No maximum limit on contributions

How to Make Contributions to the UBI NPS Account

Offline: Deposit at any Union Bank branch
Online: Use Union Bank’s Internet Banking or NPS portal
Mobile App: Union Bank’s mobile banking app supports contributions

Exit and Withdrawal Process

At Retirement (60 years):

60% can be withdrawn as a lump sum.
40% must be used to purchase an annuity.

Before Retirement:

Allowed after 10 years.
Only 20% can be withdrawn; 80% must be annuitized.

Premature Exit or Death:

Nominee gets the full corpus in case of the subscriber’s death.

NPS Account Management with Union Bank

Once enrolled, subscribers can:

View account balance and NAV
Switch fund managers
Change investment choices
Track contributions online

Conclusion

The Union Bank of India National Pension Scheme is a valuable tool for anyone looking to secure their financial future post-retirement. It combines the benefits of market-linked returns, tax deductions, and flexible investment options to build a sustainable pension fund. With support from Union Bank’s wide network and digital services, the process of opening and managing an NPS account becomes seamless and user-friendly.

By contributing regularly and understanding the various investment and withdrawal options available, investors can create a sizeable corpus to maintain financial independence in their later years. Whether you’re a salaried individual, self-employed, or a business owner, NPS in Union Bank of India can be a strategic step towards a worry-free retirement.