A Tier II account is a voluntary, optional savings account you can open alongside your mandatory Tier I NPS account, offering complete flexibility to deposit and withdraw money at any time, with no lock-in period at all — functioning much more like a regular flexible investment account than a retirement-locked one.
The trade-off for this flexibility is that Tier II contributions do not receive the tax benefits available on Tier I contributions (with a limited exception for certain government employees), so you're investing in the same underlying NPS fund options purely for their investment merit, not for tax savings. Because a Tier I account is a prerequisite, you can't open a Tier II account on its own — it's only available as an add-on to an existing NPS subscriber.
Because there's no lock-in, it can double up as a flexible investment account for goals that don't need the strict discipline of a retirement-locked account, while still using NPS's fund options.