The National Pension System (NPS), also known as National Pension Scheme, is a retirement product that will help you accumulate wealth. It is a market-linked product that needs you to invest regularly in the funds of your choice. To open your account online, you will need to have a mobile number, an email ID and an active bank account with Net banking facility.
Here is how to open an NPS account online:
1. Go to the eNPS website . Click on registration.
2.The online subscriber registration page will open. Click on new registration. Select new registration, enter your Virtual ID number, and generate an OTP. Enter the OTP you receive on your registered mobile number and click on continue.
3. After you click ‘continue’, an acknowledgement number will be generated along with your name. Then select ‘OK’
4. Enter your personal details and click on the ‘Save and proceed’.
5. The next step will ask you to enter your bank details in which you have online banking facilities. After entering the details, click on ‘Save and proceed’.
6. Now you have to decide the portfolio allocation among four available funds: equity fund, in which you can put up to 50% of your money; alternative investment fund, in which you can’t put more than 5% of your money; a government securities fund; and a corporate bond fund. Once you enter the allocation details, you need to update the nominee details in the next step.
7. After you update your nominee details, you have to upload a cancelled cheque of your account, photograph and your specimen signature.
8. In the final stage, you have to make your first contribution towards NPS subject to a minimum investment of Rs 500.
9. On successful completion of payment, your permanent retirement account number (PRAN) will be generated along with the payment receipt.
10. After making the contributions you go to the next page, which is the e-sign/print registration form page. If you choose to e-sign with Aadhaar, an OTP for the purpose of authentication will be sent to your registered mobile number. Once you key in the OTP and Aadhaar gets authenticated, your registration will be considered as signed electronically.
The NPS provides several benefits to users
Under NPS, the pension wealth, which accumulates over a period of time till retirement grows with a compounding effect.
Contribution to NPS Tier-I account is eligible for tax deduction under the Income Tax Act, 1961. An additional tax rebate of Rs 50, 000 is also allowed for contributions made to NPS Tier-I under Section 80CCD (1B) of the Income Tax Act, 1961.
Subscribers can withdraw up to 25% of their own contributions before attaining the age of superannuation. This is, however, subject to some conditions.
Under NPS, PFRDA has increased the maximum age limit from 60 years to 65 years for joining NPS.
NPS provides transparency and portability through online access of the pension account by NPS subscribers.