PFRDA launches T+2 settlement for NPS withdrawal

February 20, 2023

The Pension Fund Regulatory and Development Authority recently reduced the turnaround time of the National Pension Scheme to T+2 years. Earlier, it was T+4 years. What is T+2 or T+4? T is the date, the request was made. T+2 means, “after two days of the request”, and T+4 means “after four days of the request”.

Partial Withdrawal

A subscriber of the National Pension Scheme can withdraw less than 25% of the funds. However, this shall be done only after 10 years.

What is the change introduced?

Say a person subscribes to the scheme. He shall do this by depositing a minimum of Rs 1000. He can also open an NPS account by depositing Rs one lakh. When he exits from the scheme, he gets a matured amount at an interest of 8% or 10%. You can deposit as much ever money as you want. Money can be deposited at will. No restrictions on the timeline or amount to be deposited. Now, the only rule is that you need to wait at least ten years after depositing your money. You cannot withdraw in the middle. After ten years, you may withdraw 25% of the amount.

Now say a subscriber wants to withdraw. He submits a withdrawal form to the bank in which he opened the NPS account. With a savings account, you get the amount the same day. But with an NPS account, you will need to wait at least 2 days to get the amount. Earlier, the wait time was 4 days. The pension regulator has now reduced it to 2 days.

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