NPS Account Opening, Benefits, Features, and Everything You Must Know

NPS account can be opened by following below mentioned steps.

National Pension Scheme: Account Opening, Benefits, Features, and Other Details.

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The Indian Government has launched a scheme for pensioners called National Pension Scheme (NPS). PFRDA (Pension Fund Regulatory and Development Authority) regulates and maintains this scheme and it has been developed to provide financial security and stability to the senior citizens of the country.

The National Pension Scheme helps individuals to maintain savings for long term use and the different options provided via this scheme helps the senior citizens to have a smooth retirement time without worrying about the financial security.

Any individual working in a government, private, or an unorganized organisation can apply for NPS scheme except those working in the armed forces.

Benefits and Features of National Pension Scheme (NPS)

There are several benefits of NPS scheme. Here is the list of some benefits and features.

1. Some part of the investments made in the NPS scheme is invested in equities. Such equities offer higher returns compared to the traditional tax saving plans. Therefore, NPS is useful for people who want to have a financial security in the long run.

2. According to the pension plan, the individuals have to necessarily invest in the NPS scheme up to the age of 60 years. However, in certain circumstances like medical emergency, child's education, buying a house etc, the beneficiaries are eligible for a partial withdrawal. Out of the total contribution, beneficiaries can withdraw up to 25 percent. In the entire tenure, a partial withdrawal can be made only three times in the intervals of 5 years. Individuals must note down that all these rules are applicable for NPS Tier-1 account unlike Tier II account.

3. The investments made towards the NPS scheme with a maximum limit of Rs.1.5 lakhs is exempted from the income tax. Both employees and employers fall under the tax exemption category.

4. The NPS scheme does not allow individuals to withdraw the entire collected fund from the account even after the retirement. In order to get a regular annuity from the PFRDA registered insurance firm, individuals are supposed to keep at least 40 percent of the collected fund. The remaining 60 percent is exempted from tax.

5. As per the NPS scheme, the individuals have a freedom to invest anytime during a financial year. Also, subscribers have a choice to choose the amount they can invest in the scheme, and they can change the amount anytime they want.

There are two types of accounts for which you can apply during a NPS scheme. The tier-1 account has withdrawal limitations while as the tier-2 account is a voluntary savings account in which money withdrawal is not restricted.

How To Apply for National Pension Scheme (NPS) Online?

After linking the PAN, Aadhaar, and mobile number, following are the steps to apply for NPS scheme online.

• Visit the official website, enps.nsdl.com.

• Select any of the options - 'Corporate Subscriber ' or 'Individual Subscriber'.

• Choose the residency status: Indian/NRI.

• Select either Tier-1 account or Tier-2 account or both.

• Enter the PAN card details and select POP or bank.

• Go to the registration link.

• Choose 'Register with Aadhaar' option.

• Enter the Aadhaar number and click on generate OTP.

• You will get an OTP on your registered mobile number.

• Enter the OTP and an application form will open.

• Enter details like bank and nomination.

• Submit the application.

• You will get a Permanent Retirement Allotment Number (PRAN).

• Submit your e-signature and passport size photograph.

• You will get an OTP to verify the signature.

• Make payment via net banking.

• Once your payment is successful, your permanent retirement account number will be generated.