For information about how to open NPS account under the NPS scheme, the NPS guideline has to be followed. The NPS scheme was started with the objective of providing a good pension to the NPS account holder at the age of retirement. Retirement investment option is provided for a long time in the scheme.
By being a part of this scheme, the account holder can get a decent pension at the age of retirement. NPS scheme is completely market-linked product, in which the concerned account holder has to deposit a fixed amount monthly till the age of 60 years.
Who Can Open NPS Account
The NPS scheme was started by the Pension Fund Regulatory and Development Authority (PFRDA). Any citizen of 18 to 65 years of the country is eligible to be a part of the scheme and open an NPS account.
Any citizen of the country who has a current account in the bank can open his NPS account. For this, apart from having an account in the bank, you should have internet banking facility, mobile number, e-mail ID and identity card.
What Is NPS Account & How Many Types Are There?
NPS stands for National Pension System. Before knowing How to Open an NPS Account, we need to know that what are the types of NPS Account and how can it be opened. There are mainly two types of NPS accounts.
Under the NPS scheme, any applicant can open Tier-1, Tier-2 or both types of accounts as per his convenience. Let’s know what is Tier-1 or Tier-2 account.
Tier-1 NPS Account
This is a mandatory NPS account in which the investor gets tax exemption under section 80(c). There are significant restrictions on withdrawals from this account.
Tier-2 NPS Account
NPS Tier-2 is an optional retirement cum investment account available only to Tier-1 account holders. There is no tax exemption on the amount invested in this account.
If the investor’s Tier 1 account is in good standing, then only the investor is allowed to invest in the NPS Tier-2 account.
How to Open NPS Account?
Two types of account opening facility has been provided by any citizen of the country in the NPS scheme – first online and second offline.
PFRDA has taken full care of the convenience of the customers to make the access of the common man easy to the NPS Scheme. Following the guidelines of PFRDA, any applicant can easily open his NPS account through offline or online mode.
It completely depends on the applicant, through which medium he wants to be a part of (NPS).
Offline NPS Account
The convenience of customers has been taken care of by PFRDA for opening through offline medium. Registered (POP) centers have been set up by PFRDA by combining banks and financial institutions to make it easier for customers to access the NPS scheme.
Apart from POP centres, NPS account can also be opened by any person by filling the application form through offline mode in the branch having his/her bank account.
How to Open an NPS Account from Offline POP Centers?
To open an account under the NPS scheme, the person concerned has to submit the necessary documents like Aadhaar card, PAN card, photo etc.
Banks associated with the NPS scheme are also working as POP centers, the applicant can also open an NPS account through the concerned bank, here the applicant does not even need to do KYC.
For opening and activating NPS account through the bank, only one time Rs.125/- is charged by the particular bank.
By opening an NPS account from an offline bank, the investor is provided with the PRAN card along with other NPS Document Kit.
With the help of POP Centers, the member opening an account in the NPS scheme through offline mode, changing the fund manager and all other related services are made available to the customers as per their convenience.
Open Online NPS Account
It has become quite easy to open NPS account through online medium. The applicant should have an account in any one of the 17 banks registered with the National Securities Depository Limited. To open an NPS account, the applicant has to visit the eNPS portal.
Initially, NPS account could be opened with the help of Aadhaar number, but now PAN number has been made mandatory for the registration of the applicant in its place.
If the applicant’s bank account is linked with PAN number, then he only has to login to the eNPS portal and start the registration for the NPS account, the rest of the KYC process is completed by your bank.
Before doing online NPS account registration, the applicant should have the necessary documents like PAN number, net-banking, passport size scanned photograph and scanned signature.
How to Open an NPS Account Online
- First of all, the applicant should open the eNPS website and click on ‘National Pension Scheme’, after that go to registration and click on ‘Individual Subscriber’ button.
- In the newly opened application form, submit your complete details like name, age, full address, e-mail id, mobile number etc.
- After submitting the form, OTP will be received on the applicant’s mobile for verification.
- In the next step, the applicant has to choose between ‘Tier I and Tier II‘ or ‘Tier I only‘ account only.
- After this, as the next option, the applicant has to choose any one of the eight pension funds provided by his fund manager NPS. Your monthly deposit is managed in the pension fund only by the fund manager chosen by you.
- In the next step, the applicant should choose any one option, either Auto Mode or Active Mode for investment in NPS Pension Plan.
- In the next step, the applicant has to fill the complete details of the nominee. After the selection of the nominee, the applicant has to upload the prescribed size PAN, passport size photograph and digital signature in the JPG format in the registration form.
- The applicant has to initially pay the first installment in his NPS account through online banking or credit or debit card to complete the process of his registration. The minimum amount to be invested is Rs 500/- for Tier I account and Rs 1,000/- for Tier II account.
- In this way, after the applicant has completed the process of registration, the application should be downloaded and sent to the Central Recordkeeping Agency (CRA) through email along with all the documents within 90 days. Applicant’s PRAN kit will be received by CRA at his registered address by post.
Benefits of NPS Account
The amount deposited by the investor in the NPS scheme is managed by the fund managers, registered by PFRDA. This money amount is invested by them in various equity and debt securities. The amount invested under the NPS scheme provides good returns in the long run.
After opening an NPS account in the NPS scheme, the investor can choose another registered fund manager as per his convenience based on the performance of the investment amount or the performance of the market. This facility has been provided to the NPS account holder, that he can withdraw only 25% of the amount invested in the scheme by himself after 3 years of opening the NPS account.
An individual holding an NPS account is allowed to withdraw 25% of the amount invested in the scheme for specific purposes such as purchase of a house, marriage of children, education of children, etc.
Your future is safe with NPS account
In this way, any citizen of the country can easily open his account. After the account is opened, the applicant will get the PRAN number, after the receipt of this PRAN number, the applicant can easily deposit his investment amount in his NPS account with the help of eNPS portal or NPS mobile app.
With this deposit, that person prepares a good pension for the future.