The Pension Fund Regulatory and Development Authority plans to roll NPS Savings Account by the end of the year.

The scheme a successor to first level of New Pension Scheme (NPS) will allow the investors to make daily withdrawals and choose their investment mix. The withdrawals will be based on the daily net asset value.

As stated, NPS Savings Account can be opted only by investors who have subscribed to the first level of the scheme.

The fund managers for the scheme include State Bank of India, UTI, ICICI Bank, IDFC, Reliance Capital and Kotak Mahindra.

Launched on May 1, 2009, the first NPS scheme required the subscribers to stay invested until the age of 60. The first level of NPS attracted a mere of 843 applications since its launch three months back.

It is reasoned that the institutions involved in extending the product to the end-customers are not fully aware of the scheme is one of the reasons for poor take off. The management fee on the product is merely 0.09 basis points, which is again holding back fund mangers from promoting the scheme.

As of now the scheme does not offers any tax benefits for investors. The union budget 2009-10 proposed inclusion of NPS investments under section 80C of the Income Tax Act to provide investors tax exemption. Alternatively, it proposed to avail tax benefits if the investor uses the entire maturity amount to purchase annuities.

Banks and other financial institutions are points of presence (PoPs) for opening of NPS accounts and collection of contributions. The highest number of NPS applications collected stands at 164, by ICICI, across its 49 branches (as on 16 July, 2009).