SBI NPS Account: Eligibility, Tax Benefits & Charges

Updated: 26-12-2025 13:19:53 PM

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You can open an NPS account in SBI because it is a Point-of-Presence (PoP) in the National Pension System. A PoP or Points of Presence is an intermediary which facilitates account opening, accepts contributions (both physical cheques and online) and updates your details on request. In return it gets a commission from your NPS corpus. This is 0.25% of each offline contribution and 0.1% of each online contribution. You can find the details of the nearest SBI branch authorised to open NPS accounts here.

In addition, SBI also has an affiliate company called SBI Pension Funds Pvt. Ltd. which is a fund manager in the NPS. You can select SBI Pension Funds as your fund manager along with selecting SBI as your PoP. You can make this decision after comparing the returns of different NPS fund managers here. However you do not have to do this. You can have SBI as your PoP and a completely different company as your fund manager. There are 8 pension fund managers in the NPS including ICICI, HDFC, SBI, LIC, UTI, Reliance, Kotak and Aditya Birla.  

What is the NPS

The National Pension System (NPS), earlier known as New Pension Scheme is a pension system open to all citizens of India. The NPS invests the contributions of its subscribers into equities and debt and the final pension amount depends on the performance of these investments.

Any Indian citizen from the age of 18-65 can open an NPS account. The NPS matures at the age of 60, but can be extended till the age of 70. Partial withdrawals up to 25% of your contributions can be made from the NPS after three years of account opening for specific purposes like home buying, children’s education or serious illness.

Types of NPS Accounts

• Tier I Account: This account carries a tax deduction under Section 80C up to Rs 1.5 lakh per annum and under Section 80CCD (1B) up to Rs 50,000 per annum. On maturity at the age of 60, 40% of the corpus is tax free and can be withdrawn. Another 40% must mandatorily be used to buy an annuity. The balance 20% can either be used to buy an annuity or can be withdrawn after paying tax.
• Tier II Account: This is a voluntary retirement-cum-savings account that can be opened only if you have a Tier I account. Subscribers are free to invest or withdraw their funds anytime according to their convenience. This account has no tax deductions.

How much pension will you get in SBI NPS?

This depends on the performance of your NPS funds. Your contributions invested in the National Pension System are invested in assets like equity or debt and earn returns. Your corpus is thus expected to steadily grow over time. When you hit the age of 60, you can use the accumulated corpus to buy an annuity (monthly pension). The actual pension you get thus depends on the corpus size and the prevailing annuity rates. For example if your corpus is Rs 1 crore and the prevailing annuity rate for a simple annuity is 8%, you will get an annual payment of Rs 8 lakh. This translates to a monthly pension of Rs 66,666.