In this article, I tell you How to open NPS Account Online.
NPS(National pension system) is a retirement planning program in which you can get tax benefits. You can get 2 plans in the national pension system i.e. Tier I Plan which is purely a pension plan and Tier II Plan which is purely an investment plan.
The national pension system is regulated by PFRDA(Pension Fund Regularity and Development Authority). The money is invested in Equity and debt instruments. The money invested in National Pension System is mature after retirement. You will get some percentage of lump sum amount and some percentage of pension.
Benefits of National Pension System:
1. You will get high returns as money is invested in equity.
2. There is a tax benefit in investment and returns.
3. You can tax rebate on investment up to 1.5 Lakh under section 80c and the additional benefit of Rs. 50000 under section 80CCD for investment under NPS.
Your money is managed by Fund managers. The money of Government sector employees is managed by LIC, SBI, UTI, and the money of private-sector employees is managed by LCI, SBI, UTI, HDFC, ICICI, KOTAC, BIRLA SUN LIFE, RELIANCE.
The money of NPS is invested in Equity i.e. stock market, corporate bonds, and government bonds. The investment in equity is risky but it gives higher returns. The investment in corporate bonds has moderate risk and it gives moderate returns. The investment in Government bonds has low risk and it gives low returns as compared to other investments but is the safest investment.
The investor gets two choices for investment i.e. Active Choice and Auto Choice. In Active choice, you can invest your money up to 75% in Equity and the remaining 25% of the money is invested in corporate and government bonds. In auto choice, the fund managers will give you a chart of investment according to your age.
You can change the fund manager once a year and choices twice a year.
Anyone who can open an account in NPS is between 18 to 65 years. NRI is also eligible to open accounts in the National Pension System.
The account can be opened in an Authorised bank also called POP’s(Point of Presence) and online. You have to submit all your KYC documents and After successful registration, PRAN(Permanent Retirement Account Number) is generated. PRAN is a 12 digit unique and portable account number.
Aadhar number linked with mobile number scanned image and net banking enabled bank account is necessary to open NPS account online. You need to deposit a minimum of 500 Rs. per year to activate your NPS Account.
It is not necessary to invest a fixed amount every month, you can invest money according to your savings in an NPS account but you have to deposit 500 Rs in a year. If you fail to deposit the minimum amount in a year then you need to deposit all pending amounts in the NPS account to reactivate this account.
At the time of retirement, You have three options-
1. You can continue your investment for up to 70 years.
2. You can defer the withdrawal up to 70 years means you can invest all lump-sum amounts for the next 10 years. You will get an interest in your lumpsum amount after 10 years.
3. Exit from NPS.
If you choose to exit from NPS, then you can get up to 60% of the amount as a lump sum and 40 % amount in the annuity pension plan.
Different companies provide different annuity pension plans. You have chosen from the following 4 options-
1. Your 40% amount is invested in the annuity pension plan and you will receive pension till death.
2. Your 40% amount is invested in the annuity pension plan and you get a monthly pension and after your death, the invested amount is given to the Nominee.
3. Your 40% amount is invested in the annuity pension plan and you and you will get a pension till death and your wife will get a pension after your death.
4. Your 40% amount is invested in the annuity pension plan. First, you get a pension till death, your wife will get a pension after your death and after the death of your wife, the invested amount is returned to the Nominee.
The Retirements annuity pension plans may be different for different companies. You have to check at the time of retirement.
If you need money before retirement then you can partially withdraw your money only in few cases such as-
1.Critical illness
2.Children higher education
You can partially withdraw money only 3 times within 30 years and only 25% of your own contribution.
NPS Tier II Account-
You can invest any amount of money in tier II accounts and withdraw money at any time but there are no tax benefits. You can only open this account if you have a tier I account. You can open this account at POP’s(Point of Presence), Online, and in the NPS Mobile app.
How to Open NPS Account Online:
Follow the following steps to open an NPS account online-
1. Visit the official website https://enps.nsdl.com.
2. You need an active Email ID, Aadhar number linked with mobile number, and Bank account with net banking facility enabled.
3. If you want to open an NPS account with PAN then you need to verify your KYC details in POP(Point of Presence). You will get a detailed list of POP on the official website.
4. Fill in all your detail online.
5. Upload Photographs and Signatures. If you choose Aadhar then it is optional to upload photographs.
Make a minimum payment of 500 Rs. Online. The payment can be done through SBI epay, Billdesk and you can also pay through UPI.
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