NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Retirement Products
Mr. Raghavan, aged 45, is a salaried individual who wants to build a retirement corpus through NPS. Which statement about the Tier II account of NPS is correct?
NPS Tier II is a voluntary, flexible savings account without a retirement lock-in, allowing withdrawals. A subscriber can open it only if holding an active Tier I account. Lock-in and annuity requirements apply to Tier I, not Tier II.
- AIt is a mandatory retirement account with a lock-in until age 60
- BIt is a voluntary withdrawal-friendly savings facility that can be opened only by a person holding an active Tier I accountCorrect
- CIt cannot hold any equity exposure
- DIt provides an automatic annuity at age 60
Explanation
Tier II is a voluntary savings account with no lock-in, so withdrawals are permitted. It can be opened only when the person has an active Tier I account. Tier I carries the retirement lock-in and annuity rules; Tier II does not.
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