The National Pension System (NPS) is a retirement-focused investment scheme designed to provide financial security after retirement. It allows individuals between the ages of 18 and 60 to contribute towards their retirement savings. Normally, the funds accumulated in an NPS account can be withdrawn only after retirement, but in certain emergency situations, you can withdraw money before the age of 60.

Here’s a step-by-step guide on how to withdraw money from NPS in case of an emergency.

Types of NPS Accounts & Withdrawal Rules

NPS has two types of accounts:

🔹 Tier 1 Account:

• This is a mandatory pension account with strict withdrawal restrictions.
• Funds can only be withdrawn under special circumstances such as medical emergencies, children’s education, marriage, or home purchase.
• Partial withdrawals are allowed only after completing 3 years.
• A maximum of 3 withdrawals is allowed during the entire tenure.

🔹 Tier 2 Account:

• This is a voluntary savings account with no withdrawal restrictions.
• You can withdraw money anytime like a normal savings account.

📌 Common Misconception: Many people believe that NPS funds can only be withdrawn after the age of 60, but the scheme allows partial withdrawals in emergencies.

Step-by-Step Process to Withdraw Money from NPS in Emergency

🔹 Step 1: Visit the official NSDL (National Securities Depository Limited) website for NPS.
🔹 Step 2: Log in using your PRAN (Permanent Retirement Account Number) and date of birth.
🔹 Step 3: Click on the option to request a withdrawal.
🔹 Step 4: Fill out the withdrawal request form and upload necessary KYC documents (such as ID proof, address proof, and reason for withdrawal).
🔹 Step 5: Once the request is verified and approved, the amount will be credited to your registered bank account.

📌 Note: The process may take a few working days depending on the verification.

Important NPS Withdrawal Rules

✅ If the total amount in your NPS account is less than ₹5 lakh, you can withdraw the entire amount without purchasing an annuity.

✅ You must have been an NPS subscriber for at least 3 years to be eligible for partial withdrawals.

✅ Partial withdrawals can be made only 3 times throughout the tenure.

✅ The money withdrawn before retirement can be used only for:

• Children’s higher education
• Marriage of children
• Buying or constructing a house
• Medical emergencies (critical illnesses)

How to Close an NPS Account?

If you wish to close your NPS account, you must meet certain conditions set by the government:

🔹 Lock-in Period: NPS accounts have a minimum lock-in period of 5 to 10 years, meaning they cannot be closed before this period.

🔹 For salaried individuals:

• You can close the account only after completing 10 years in the scheme.
• Before this period, fund withdrawal is not allowed except in emergency situations.

📌 Final Note: If you are planning to withdraw from your NPS Tier 1 account, ensure that your withdrawal reason qualifies under the approved emergency conditions and follow the proper procedure for smooth processing.

Final Thoughts

NPS is primarily designed for retirement savings, but it does offer some flexibility for emergency withdrawals. Before withdrawing, make sure your reason is valid, and remember that early withdrawals might impact your retirement savings. If you need funds urgently, consider withdrawing from your Tier 2 account instead of Tier 1.

🔹 Need quick access to funds? Log in to the NSDL NPS portal and follow the steps mentioned above to initiate your withdrawal request. 🚀