The National Pension System (NPS) is a voluntary pension scheme that offers the dual benefits of building a retirement corpus and tax saving. NPS offers portfolio diversification as it allows you to invest across multiple asset classes such as equity, corporate debt, government securities, and alternate investment funds. NPS also gives you the option of being as active or passive in investment decisions such as asset allocation as you desire and accordingly you can choose either the active or auto investment choice. If you’re an Indian citizen, resident or non-resident, between the ages of 18 and 70, you can open an NPS account and start contributing towards your retirement fund. If you’re wondering how to apply for NPS, read on.
How to open an NPS account?
There are two ways in which you can apply for NPS. The first is offline by visiting one of the Points of Presence (POP). You can go on the official eNPS website to see the complete list of the empanelled POPs. You need to complete the KYC process and fill out the NPS subscription to generate your Permanent Retirement Account Number (PRAN). Alternatively, you can also open an NPS account online. To know how to open NPS online, read on.
How to open an NPS account online?
You might find the process of online NPS account opening more convenient since you can do it easily from your smart devices. You simply need to go on the official eNPS website and first create your PRAN. For this, you need to undergo the KYC verification process with your PAN card and fill out the registration form. After this is done, you can open NPS account online by choosing either of the two options:
- Online NPS account opening based on Aadhaar authentication
For this, you need to select the eSign option. Your Aadhaar will be authenticated to add your eSign to the registration form. The charges for the eSign option are Rs 5.90 plus the applicable taxes. In this option, the entire process is completed online.
- Online NPS account opening through print and courier
In this option, you can take a printout of the registration form, paste your photograph, and affix your signature physically. After this, you can courier the form to the given address. Do note that this needs to be done within 30 days from the allotment of the PRAN or the PRAN will be temporarily frozen.
Contribution when opening an NPS account
NPS has two types of accounts – tier I and tier II. Tier I is the default, non-withdrawable retirement account while tier II is a voluntary, withdrawable account. When opening your NPS account, the tier I account is the one that is opened for which you need to contribute Rs 500. You can also choose to open a tier II account for which you need to contribute Rs 1,000. To maintain your NPS account, there is also a minimum yearly contribution. For the tier I account it is Rs 1,000 and for the tier II account it is Rs 250.
Opening your NPS account online is simple and quick and allows you to start building your retirement corpus in a strategic way without any delay. While applying online, you can also read more about the different investment options and benefits of NPS to know how this instrument will fit into your overall investment strategy.