Planning for your retirement is always a priority no matter where you live. For Indians who live abroad, the NPS for NRI offers a government-backed, market-linked way to build a retirement fund in India.
The national pension system is regulated by the Pension Fund Regulatory and Development Authority (PFRDA) and has been available to Non-Resident Indians since 2009. Whether you are an NRI or an OCI cardholder considering your options, this guide on NPS for NRI covers everything you need to know.
The NPS for NRI is an extension of India’s flagship retirement savings scheme, the National Pension System. Put simply, it lets eligible Indian nationals living abroad — and eligible OCI subscribers — contribute towards a long-term pension fund back home, without needing to be physically present in India to manage it.
Under NPS, you make regular contributions through your working years. PFRDA-registered pension fund managers invest these contributions across asset classes such as equities, corporate bonds, government securities, and other permitted investment options. At retirement, the accumulated corpus becomes available for partial withdrawal, phased withdrawal, annuity purchase, or lump-sum withdrawal, based on applicable exit and withdrawal rules.
One thing worth setting straight early: NPS is a market-linked retirement product. It does not offer fixed nps for nri interest rates the way a fixed deposit does. Returns depend on the pension fund you select, your asset allocation, market performance, and how long you stay invested.
NPS for NRI has an array of advantages for structured, long-term savings in India. Here is why, “Is NPS good for NRI?” gets a positive answer from financial planners:
Before opening an account, understanding the eligibility criteria for NPS for NRI & OCI is essential. The key conditions are:
On nps for oci holders and nps for oci specifically — OCI subscribers are eligible to open a Tier I NPS account, subject to applicable KYC, banking, and PFRDA guidelines. It is worth noting, however, that neither NRIs nor OCIs are permitted to activate Tier II accounts under NPS.
Requirements may vary based on the Point of Presence, CRA, onboarding route, and latest KYC norms — but here is what is typically needed.
For NRIs:
For OCI subscribers:
Opening an NPS for NRI account can be done online through the eNPS portal or offline via a Point of Presence.
To keep the Tier I account active, a minimum annual contribution of ₹1,000 must be made every financial year.
Two things worth keeping in mind: the Power of Attorney facility is not available for NPS accounts, and joint accounts cannot be created. You can, however, appoint a nominee — which is strongly advisable.
NPS does not work on a fixed interest rate model. It offers market-linked returns. But for those with taxable income in India, the tax benefits on nps can be genuinely significant, and are often an underappreciated part of the overall return picture.
NRIs and eligible OCI subscribers filing returns under the old tax regime can avail the following, as applicable:
PFRDA updated NPS exit and withdrawal rules in December 2025, making the scheme more flexible for eligible subscribers.
For All Citizen Model and Corporate Sector subscribers, including eligible NRI/OCI subscribers:
If the accumulated pension wealth is ₹8 lakh or less: The subscriber may withdraw 100% of the corpus, subject to applicable withdrawal options.
If the accumulated pension wealth is more than ₹8 lakh and up to ₹12 lakh: Up to ₹6 lakh may be withdrawn as a lump sum. The balance may be used for annuity or Systematic Unit Redemption, as permitted under the relevant rules.
If the accumulated pension wealth exceeds ₹12 lakh: Up to 80% may be withdrawn as a lump sum, and at least 20% must be used to purchase an annuity from a PFRDA-approved Annuity Service Provider, as applicable.
The earlier 5-year minimum subscription requirement for premature exit under the All Citizen Model has been removed. Premature exit, however, remains subject to corpus-based withdrawal and annuity conditions.
If the accumulated pension wealth is ₹5 lakh or less: The entire corpus may be withdrawn, subject to applicable rules and available withdrawal options.
If the accumulated pension wealth exceeds ₹5 lakh: At least 80% must be used to purchase an annuity. The remaining amount — up to 20% — can be withdrawn as a lump sum or through permitted phased withdrawal options, as applicable.
Partial withdrawals are allowed after the required holding period and only for specified purposes — children’s education or marriage, purchase or construction of a house, medical treatment or hospitalisation, and other permitted purposes under PFRDA rules.
These are generally capped at 25% of the subscriber’s own contributions, subject to applicable frequency, interval, and eligibility conditions.
In the event of the subscriber’s death, 100% of the accumulated corpus is payable to the nominee or legal heir. The nominee or legal heir may also choose from options such as annuity, Systematic Lumpsum Withdrawal, or Systematic Unit Redemption, as permitted under the relevant rules.
Now that you know the answer to “Is NPS allowed for NRI?”, you can evaluate the dual advantage of market-linked wealth building and tax efficiency. Eligible NRIs and OCI subscribers can use NPS as a long-term retirement planning option in India — keeping in mind that returns are market-linked and not guaranteed.
Run the numbers using an nps calculator — put in your age, monthly contribution, expected return, investment horizon, and annuity assumptions.
Ready to secure your retirement from wherever you are in the world? Open your NPS account online with HDFC Pension today and begin your journey towards a financially independent retirement in India.
Disclaimer: Tax laws, PFRDA regulations, FEMA rules, and NPS withdrawal norms are subject to change. Benefits depend on individual eligibility. NPS is regulated by PFRDA. Past performance is not indicative of future results; NPS returns are market-linked.
NPS is transparent regarding costs. All charges are factually stated and regulated to prevent excessive fees.
Entity | Type of Charge | Amount (Approximate) |
POP | Initial NPS account opening | ₹400 |
CRA | Annual Maintenance Charge | Between ₹65 and ₹95 |
PFM | Investment Management Fee | 0.03% to 0.09% of AUM |
Trustee | Trustee Fee | 0.003% per annum |
When you buy NPS units, your funds are invested across four distinct asset classes.
The investment is split into:
Subscribers can choose between two modes. In Auto Choice, the system automatically reallocates your NPS contribution from aggressive assets to conservative ones as you age. Alternatively, Active Choice gives you full control to decide the percentage of your funds allocated to each class, with the maximum equity allocation capped at 75% for a Tier I account.
Large organisations often implement corporate NPS models to help their employees save more effectively. This allows for additional NPS tax benefits under Section 80CCD(2). Here, employer contributions are deductible from the employee’s taxable income.
Your retirement strategy hinges on the choice of your Pension Fund Manager. In this regard, HDFC Pension has established itself as a trusted partner for thousands of subscribers across India.
