NPS Calculator

NPS corpus is calculated by compounding monthly contributions (employee + employer) at the expected annual return rate, month by month, until retirement. The formula is FV = M x [((1 + r)^n - 1) / r] x (1 + r), where M is total monthly contribution, r is the monthly return rate (annual rate / 12), and n is the number of months. At retirement, at least 40% must be used to purchase an annuity and up to 60% can be withdrawn as a tax-free lump sum.

Return rate depends on your scheme. Life Cycle 75 (high equity) has delivered approximately 12.5% CAGR over the past 10 years. Life Cycle 50 (moderate) has returned 10.5%. Life Cycle 25 (conservative) and Central Government scheme have returned 8.5%. Use 10% as a reasonable base case for long-term planning. Always use a conservative estimate since NPS returns are market-linked and not guaranteed.

At age 60, you must use at least 40% of your NPS corpus to purchase an annuity from an IRDAI-registered life insurer. This annuity provides a monthly pension for life. The remaining 60% can be withdrawn as a lump sum, which is completely tax-free under the Finance Act 2019. You can also annuitise more than 40% if you prefer a higher pension over the lump sum.

NPS offers three separate deductions: Section 80CCD(1) allows deduction up to 10% of salary (basic + DA) within the Rs 1.5 lakh 80C limit. Section 80CCD(1B) provides an exclusive additional deduction of Rs 50,000 per year for NPS, over and above the 80C limit. Section 80CCD(2) allows employer contributions up to 10% of salary (14% for central government) as a deduction without any upper monetary limit. Total possible NPS deductions can exceed Rs 2 lakh for a salaried person.

For NPS Tier I, the minimum contribution is Rs 500 per deposit and Rs 1,000 per financial year. There is no maximum contribution limit under the scheme. For NPS Tier II (voluntary savings account), the minimum initial contribution is Rs 250. NPS Tier II does not provide tax benefits but allows unrestricted withdrawals.

Auto Choice (Lifecycle Fund) automatically adjusts your equity-debt allocation based on age. Life Cycle 75 starts at 75% equity till age 35 and reduces to 15% by age 55. Life Cycle 50 starts at 50% equity and reduces to 10%. Life Cycle 25 starts at 25% equity and reduces to 5%. Active Choice lets you set your own allocation: up to 75% in Equity (E), up to 100% in Corporate Bonds (C), and up to 100% in Government Securities (G), totalling 100%.

Partial withdrawals are allowed after 3 years of NPS account opening for specific purposes: higher education or marriage of children, purchase or construction of a residential house, treatment of critical illness, or disability. Maximum withdrawal is 25% of the employee own contributions, with up to 3 withdrawals across the entire tenure. Premature exit before age 60 requires 80% of corpus to be annuitised; only 20% can be withdrawn as lump sum.

NPS offers market-linked returns with historically higher long-term returns (10-13% CAGR in equity schemes vs PPF at 7.1% for FY26). NPS also provides Rs 50,000 additional tax deduction under 80CCD(1B) that PPF does not. However, 40% of NPS corpus must be annuitised (pension is taxable), while PPF maturity is 100% tax-free. NPS suits investors seeking higher growth and willing to accept market risk; PPF suits risk-averse investors wanting guaranteed, tax-free returns.

Annuity rates from Indian life insurers for NPS (Annuity for Life with Return of Purchase Price at 60 years) currently range from 6.0% to 6.75% per annum. This rate is locked in at the time of annuity purchase and depends on the insurer, age at annuity purchase, and the annuity variant chosen. At 6.5%, a Rs 40 lakh annuity corpus provides approximately Rs 21,667 per month. The monthly pension from annuity is fully taxable.

The annuity ratio is the percentage of your NPS corpus you use to purchase an annuity. Per PFRDA guidelines, the minimum annuity ratio is 40% for subscribers retiring at or after age 60. For premature exit before 60, the minimum is 80%. You can choose a higher annuity ratio (up to 100%) if you want a larger monthly pension and are willing to forgo a portion of the lump sum.

Government employees have a default contribution of 10% of their basic salary plus DA, while the government contributes 14%. The default investment scheme is the Central Government or State Government scheme, which predominantly invests in government securities and corporate bonds, generating historical returns of 8.5% to 9%.

The National Pension Scheme uses a standard compound interest formula for regular SIP investments: FV = M x [((1 + r)^n - 1) / r] x (1 + r), where M is the total monthly contribution (employee + employer), r is the expected monthly rate of return, and n is the total number of months until retirement.

Yes, NRI, OCI, and PIO cardholders between 18 and 70 years of age are eligible to open an NPS account. Contributions can be made from a NRO or NRE account. However, the account will be closed and all proceeds repatriated if the subscriber becomes a citizen of another country. NRI investors should consult a tax adviser since the tax treatment of NPS in their country of residence may differ.

Select "Government" as your sector and pick the Central Government or State Government scheme. The calculator applies the default 10% employee and 14% employer contribution split used across most government payrolls, along with the historical 8.5% CAGR for that scheme. Adjust the monthly contribution slider if your basic pay plus DA differs from the default.

Yes. Set the monthly contribution slider to a low value or zero, then enter your one-time deposit amount in the Existing NPS Corpus field under More settings. The calculator compounds that lumpsum alone at your chosen return rate through to retirement, without adding further monthly contributions.

The NPS maturity amount is the total corpus shown at your selected retirement age, before any split into lump sum and annuity. Enter your monthly contribution, current age, retirement age, and expected return rate, and the calculator displays the maturity corpus instantly at the top of the results panel.

Tier II is a voluntary NPS savings account with no lock-in and no tax deduction, separate from the retirement-focused Tier I account. This calculator projects Tier I, since that is the account with the 80CCD tax benefits and the compounding relevant to retirement planning. Tier II withdrawals are unrestricted and do not need a maturity projection.

PRAN, or Permanent Retirement Account Number, is the unique identifier issued by the Central Recordkeeping Agency when you open an NPS account. It is used to log in and track your actual contributions and corpus on the CRA or NPS Trust portal. It has no bearing on the projection formula used by this calculator.

Yes. The Annual Contribution Increment field under More settings raises your monthly contribution by a fixed percentage every year, compounding on top of the previous year’s amount. Setting it to 5% or 10% reflects a typical annual salary increment being applied to your NPS deduction.

Fermor is building the automated financial action layer for India. The goal is to close the gap between knowing what you should do with your money and actually doing it. The calculators are the distribution layer. The actual product connects real financial accounts through the RBI-regulated Account Aggregator framework and automates actions like moving idle cash to liquid funds, paying advance tax, and filling unused 80C deductions.