Launched on October 1 last year, the direct remittance (D-Remit) facility in national pension system (NPS) has received robust response from subscribers. Nearly 2 lakh subscribers opted for it investing more than Rs 200 crore during the last six months as of March 2021, according to pension regulator PFRDA.
Even as the NPS is a market-linked product, earlier the subscribers could not get the NAV of the same day on which they invested the money. With D-Remit, the option to get the same-day NAV is now available under NPS.
"If you contribute to the NPS through the normal process, you get the NAV on T+2 basis. One can avoid this two-day delay with the D-Remit facility. Many people have lapped it up because more than Rs 200 crore has been transferred to the Trustee bank as of March 2021. About 2 lakh people have already opened the Virtual Account," informs PFRDA Chairman Supratim Bandyopadhyay to BusinessToday.In.
"More money is coming from the tier-2 accounts than the tier-1, while a lot of subscribers have chosen the SIP mode in both," he adds.
Tier-1 NPS account has a lock-in till the age of 60 years, while tier-2 account is voluntary with flexible investment and withdrawal rules.
How to opt for the D-Remit facility
D-Remit is an electronic system through which money can be directly transferred from your bank account to the NPS Trustee Bank (Axis Bank) instead of routing it through the bank account of your service provider. All you have to do is open a Virtual Account with the Trustee Bank. Here is how to do it:
- STEP ONE - Visit the e-NPS website -- https://enps.nsdl.com/eNPS/NationalPensionSystem.html -- and click on 'National Pension System'
- STEP TWO - Click on 'Get Same Day NAV'
- STEP THREE - Provide details to verify your PRAN (Permanent Retirement Account Number)
- STEP FOUR - Submit OTP received on registered mobile number/email ID
- STEP FIVE - Select account (Tier-1 or Tier-2) for which virtual account is to be created and click on 'Generate Virtual Account'
- STEP SIX - The request is forwarded to the Trustee Bank and an acknowledgement number is displayed. Separate number is generated for each tier type.
After authorisation by Trustee Bank (by next working day), Virtual Account becomes active. A confirmation on activation is sent from the CRA (Central Record Keeping Agency) system.
STEP SEVEN - Login to Net Banking facility of your bank and add the Virtual Account as Beneficiary Account along with your name (as per CRA records) as Beneficiary Name. You need to add 'UTIB0CCH274' as IFS Code of Axis Bank (Trustee Bank) for transfer of funds
One should use RTGS/NEFT/IMPS as the mode of remittance. The minimum investment amount in NPS is Rs 500 per year.
How to set up SIP in NPS
Once the Trustee Bank has been added as a beneficiary in your bank account, you may set a Standing Instruction through the same internet banking login for investing a specified amount on a regular interval to your NPS accounts. The SIP mode could be daily, monthly or quarterly.