The National Pension System (NPS) is a government-sponsored pension scheme that is open to all Indian citizens. It’s a great tool for planning your retirement as it offers a mix of equity, fixed deposits, corporate bonds, liquid funds, and government funds to invest in. Opening an NPS account online is a straightforward process that can be completed from the comfort of your home. This guide will walk you through the steps of opening an NPS account online, ensuring a smooth and hassle-free experience.
The National Pension Scheme (NPS) is an investment plan aided by the government for everyone above 18 years of age, who want a regular flow of income in their retirement life. You can invest in this plan, and after maturity, it gives you returns in the form of income from the annuities. An individual has four options to invest in, under NPS, i.e., equity, corporate debt, alternative investment funds, and government bonds. Let's get into detail about this scheme and how to open an NPS account.
There are two account options for you under NPS. So, before you know how to open an NPS account, let's know about the types of NPS accounts.
Tier 1 is the primary account of NPS. Anyone wishing to invest in NPS must open a Tier 1 account. This account could be opened with a minimum investment of ₹500 either online or offline. After that, you need to make a minimum contribution of ₹1,000 year. The maturity age of this account is 65 for the account holder. After maturity, 60% of the investment can be withdrawn (with applicable tax), and the rest of 40% is used to purchase annuities (without tax) that will bring regular monthly income.
Tier 2 is not a mandatory account under NPS. One may or may not choose to open it as per their interest. The minimum account opening investment is ₹1,000. Apart from this, you are not bound to make any minimum yearly contribution. You may or may not choose to deposit regularly. There is no lock-in period for Tier 2 accounts, so you can withdraw money whenever you want.
If you have planned already or may plan in the near future to open an NPS account, you must know how to open an NPS account. There are broadly two options for you, the online and the offline method. Either is fine, and you can choose as per your convenience or preference.
The online method of opening an NPS account is as follows-
You will also receive a confirmation SMS and mail on your registered email ID.
If you have successfully created your NPS account and are now eager to log in to your account, you can easily do so by using the PRAN number generated earlier. Other ways to log in are mentioned below-
Before going about opening an NPS account, you must first have a list of the documents required. The documents mentioned on the NSDL website that is required for opening an NPS account are as follows:
If the KYC process is not done earlier, the documents required for opening an NPS account online are:
Opening an NPS account is very straightforward. Any Indian citizen between the age of 18 to 60 years of age can apply for NPS. Also, the individual must comply with the KYC norms.. Retirement planning is something that most of us don’t consider until the very last minute, and with schemes like these, it only indicates that we need to start planning early if we want to live a stress-free retired life.
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There is no fixed interest rate on NPS. Depending on the investment scheme you choose under NPS and the performance of your scheme, you get returns. However, the average return witnessed is somewhere between 9%-12%.
You can either visit the official website of NPS, eNPS or visit your nearest PoP-SP to open your NPS account. Apart from this, you can also check the NPS section of Fi Money for further information
There are two ways to add your NPS to your bank account. Online: By visiting your bank's website and search under the 'Deposit & Investment' section. Offline: By visiting your nearest bank branch for NPS and submitting NPS Contribution Instruction Slip (NCIS) along with the contribution amount.