How to Open NPS Account? NPS is a National Pension System or National Pension Scheme. It is a social security scheme which provides suitable income to Indian Citizen after retirement. NPS is also one of the best tax saving investment options. If you are young and planning for retirement you can consider opening NPS Account. NPS account can be open Online & Offline with banks like ICICI, SBI, and HDFC. You require a PAN card number and bank account with a registered bank to open an NPS account.
National Pension Scheme (NPS) is one of the best investment schemes for retirement planning. Apart from investment, NPS also act as a very good tax saving tool. NPS allows additional tax benefit of Rs 50000 under section 80CCD (1B). This amount can be claimed for deduction during a particular financial year. You can claim the deduction over and above the Rs 1.5 lakh limit as prescribed under the section 80C of income tax act. The deduction under 80 CCD (1) is available to both salaried and non-salaried individuals.
NPS offers two types of accounts –
Tire I – Traditional account where withdrawal is not possible
Tire II – Account where withdrawal is possible
Under NPS subscriber is free to select investment option and fund manager. An Investor can choose whether to invest in equity, debt or government securities, not only that subscriber can select investment portion also. This makes this scheme unique from an investment point of view.
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National Pension Scheme Account Features
- You can save some money every month using a NPS scheme till you retire from your job.
- Under the NPS scheme your money is invested based on your risk profile. If you are young, your money will be invested in equity shares to provide a higher return in long-run.
- If your age is near retirement, your money will be invested in the debt market to make it more secure.
- You can also select a fund manager for managing your NPS funds. You can also switch funds as per your financial goals. You can save an additional tax of Rs.50,000 by investing in NPS.
Only Indian citizen or NRI under 18 to 60 years of age can open an NPS account in India. You should have a PAN card. You can contact the nearest bank for opening a NPS account.
How to Open NPS Account Offline?
Steps for opening NPS account offline are given below.
- Fill the registration form with your personal details, bank account number, asset allocation, and a pension fund you will like to choose.
- Submit your KYC documents and you will be subscribed to your NPS account. If you are opening one with the bank then KYC is not required.
- As soon your account is open, you will get a permanent retirement account number (PRAN), which is unique and portable.
- You can open an NPS account in India with a minimum amount of Rs 6,000 a year and a minimum contribution of Rs 500. There will also be a one-time subscription fee of Rs 125
- You can access your account online with the unique password allotted to you.
How to Open NPS Account Online?
Steps for opening NPS account Online are given below.
Step 1 –
Visit eNPS website and click on “National Pension System”. On the popup window click on “Registration”.
Step 2 –
In this step, you need to select various options. If you are opening a new account select “New Registration”. If you want to complete pervious registration select “Complete Pending Registration”. The third option is e Signing or taking print of Registration form.
Now as you are opening an account as an individual, choose the individual subscriber option. If you are subscribing to an NPS account via your organization than choose the corporate subscriber.
You can also subscribe to NPS account even if you are an NRI.
You are now asked to choose the type of account, which can be either Type I or Type II or both. Tier II account facilitates you to invest more in the NPS account and can withdraw your money anytime
Enter your PAN card number and select the bank where you have a saving bank account. Your bank account will be linked to your NPS account. Once you are done press continue button.
Step 3 –
Now you need to provide your personal information such as name, gender, mobile number, email id, family details. You are also required to provide identity proof and birth proof. Enter captcha information and click on Generate Acknowledgement No.
Acknowledgement slip with acknowledgement number will be displayed on the screen. You can save this slip.
Step 4 –
In the next section provide contact information and Bank account detail such as bank account number, IFSC code, Branch address etc. In the next tab you need to provide nominee detail and select the fund manager.
Next, you choose the mode of investment. There are two modes of investment, an auto mode, and an active investment mode. In auto mode, the equity allocation of your money will decrease with your increasing age. This will work automatically and you don’t require handling it manually. In the active investment mode, you need to fix an asset allocation as per your choice.
Step 5 –
Upload required documents including your photograph and signature. Once you are done move to the Payment detail section. Here you need to provide first time payment. The minimum amount for Tier I is Rs 500, and for Tier II its Rs 1000 respectively. You need to pay transaction charges as applicable.
Once you make the payment, your Permanent Retirement Account Number (PRAN) will be generated along with payment receipt.
Step 6 –
After making the contributions you go to the next page, which is the e-sign/print registration form page. You can choose to e-sign with Aadhaar or you can affix your signature and send it to the Central record keeping agency at below address:
Central Record Keeping Agency (eNPS)
NSDL e-Governance Infrastructure Limited,
Times Tower, 1st Floor,
Kamala Mills Compound,
Senapati Bapat Marg,
Mumbai – 400013
Opening NPS Account Online is very easy and transparent. If you are planning to open NPS account, you should opt for online method only.