You can withdraw money from NPS even before completing 60 years of age, know these rules

If you want to get a big pension after your retirement, then National Pension System (NPS) can be a good option for you. NPS is a government scheme that is linked to the market, so its return depends on the performance of the market. By investing in this scheme, you get a monthly pension after maturity and you can also do partial withdrawal if needed.

Rules for partial withdrawal and premature exit under NPS:

Partial withdrawal:

After the lock-in period of 3 years in NPS, you can make partial withdrawal for certain purposes:

You can withdraw only 25% of your contribution (excluding returns).

Contributions made by the employer will not be included in the calculation of partial withdrawal.

During the entire investment period, partial withdrawal can be made a maximum of 3 times.

This withdrawal can be done for buying a house, treatment of critical illness, education, marriage of children, disability, or starting a new business.

Premature Exit:

The NPS account is normally active till the age of 60, but you can exit even before that, provided certain conditions are met.

You can exit the scheme only after completing 5 years. If you have started investing in NPS after 60 years, you can withdraw even after 3 years.

On premature withdrawal, you can withdraw only 20% of the total fund in lump sum. The remaining 80% will have to be used to buy an annuity, which will provide you pension throughout your life.

If the total amount deposited in your fund is less than Rs 2.5 lakh, you can withdraw the entire amount in lump sum.

This system of partial withdrawal and premature exit in the NPS scheme gives you the flexibility to meet emergency needs during investment, while at the same time helping you maintain a safe fund for your retirement.