Also known as National Pension Scheme, the National Pension System (NPS) is a retirement product which will be helpful to achieve wealth. It is actually a market-linked investment product which requires regular investment in your desired funds.
To open NPS account online, you should have an email ID, mobile number and active bank account which are enabled with net banking.
Requirements to Launch NPS Account
- PAN or Aadhar. Make sure you have current address and mobile number in your Aadhaar. PAN should also be linked to bank account.
- Passport size photograph (4-12 kb)
- Net banking enabled, credit or debit card
- Scanned image of signature (12 kb)
Steps to Open NPS account online
- Visit official eNPS portal and click on “Registration”.
- It will open the online subscriber registration page. Click on the option new registration. Enter your virtual ID after selecting new registration option, and generate OTP. Enter OTP you get on your registered mobile number and click “Continue”.
- After clicking ‘Continue’, you will be able to generate an acknowledgement number with user name and select OK.
- Enter your private data and click “Save and proceed”.
- On the next step, you will need to enter bank details on which you have online banking enabled. Click on save and proceed after entering the details.
- Now you need to choose the portfolio allocation among the four funds available –
- Equity fund, in which you can deposit around 50% of your money
- Alternative investment fund, in which you cannot invest more than 5% of your income
- Government securities fund
- Corporate bond fund
- After entering allocation details update the details of nominee in the next step.
- Once you update the details of your nominee, upload the cancelled check of your account, specimen signature, and photograph.
- In the last stage, make first contribution for NPS which is subject to investment of Rs. 500 minimum.
- After making payment successfully, you will be able to generate your permanent retirement account (PRAN) along with payment receipt.
- After making contributions, you can access next page, i.e. the print registration/e-sign form page. If you want to e-sign with Aadhaar, OTP will be sent for verification to your registered mobile number. Once you enter the OTP and proceed, your Aadhaar will be verified, your registration will be signed electronically.
There are several benefits of NPS Account for the users
- The pension wealth, which combines over a certain time period till retirement increases with compounding effect under NPS.
- In NPS Tier 1 account, the contribution is eligible for tax deduction under Income tax Act, 1961. Addition rebate of Rs. 50000 is also allowed for contributions to NPS Tier 1 under section 80CCD (1B).
- Subscribers are able to withdraw around 25% of their whole contributions before getting to the age of superannuation. However, it is subject to certain conditions.
- The PFRDA has raised the maximum age limit ranging from 60 years to 65 years to join NPS.
- NPS has enough of portability and transparency by accessing pension account online by NPS subscribers.