For all individuals, retirement is an important financial goal. Those who systematically plan their investments, always keep some funds aside to invest in National Pension System (NPS). Regulated by the Pension Fund Regulatory and Development Authority (PFRDA) and the central government, the NPS can be described as a contributed retirement planning scheme for Indian citizens. Since it is a market-based product, the returns offered are based on the fund's performance. As per financial experts, NPS is one of the most effective long-term investments for one’s retirement, and also offers decent tax benefits under Sec under 80CCD (1), Section 80CCD (1B), and Section 80CCD (2) of the Indian Income Tax Act, 1961.
How to open an NPS account
An NPS account can easily be opened online using Aadhaar card or PAN card. The age limit to open the account has been fixed between 18 years and 70 years years. Subscribers can open a Tier-I – the primary, pension account, and also a Tier-II or investment account.
Registration using Aadhaar card
The subscriber can visit the NSDL portal and register himself to open an eNPS account. Once signed in, the subscriber should click on ‘Demographic Changes’ under the menu option and then select the ‘Update Personal Details’ option.
From there on the ‘Subscriber Modification’ page, the subscriber has to select ‘Add/Update Nominee details and then click on ‘Confirm’ to proceed further. One has to choose from Tier 1 or Tier 2 account and then declare nomination for the account.
For nominations, nominees’ name, date of birth, relationship, guardian name, address, PIN code, city, state, and country, and whether he or she is an adult or not – all these details have to be filled. Following that, the subscriber has to click on ‘add’ if you want to add more than 1 nominee, or else press ‘Save’ for the given details.
In case, a subscriber wants to make changes in the nomination form, he has to click on ‘Modify’ or else click on ‘Submit’ to proceed further.
Following this, an OTP will be sent to your registered mobile number, which has to be filled. The next step would include the subscriber e-signing the modification form. For this, he or she needs to click on ‘eSign & Download’.
Once done, the subscriber can click on ‘Proceed’, which will take him to the ‘NSDL Electronic Signature Service’ page under which you need to accept all the declarations.
Following that, the portal will ask for your VID/Aadhaar number and click on ‘Send OTP’. Once filled up, the subscriber has to click on ‘Verify OTP’.
Now, in the last step, the subscriber has to click on ‘Download e-Sign file’ and the modified nomination details will be downloaded on your device in a PDF format.
Registration using PAN card
A subscriber can also use his or her PAN details to open an NPS account. You can also open your account by visiting the Karvy website. To open an NPS account using a PAN card, the details will be first verified by any entity of the subscriber’s choice. It can be a bank or any depository. One can give details of your bank account number with the name of the bank or you can also choose to get it verified by the depository where you have your Demat account.
Under this process, one has to upload scanned copies of the PAN card, a cancelled cheque, the latest photograph, and a signature in specified formats.
Under both options, a subscriber can opt for the ePRAN (Permanent Retirement Account Number) card instead of the physical card as that can save a lot of money. While for a Physical PRAN card, one has to Rs 40 to NSDL and Rs 39.36 to Karvy. For an ePran card, the charges are Rs 4 for Karvy and Rs 18 for NSDL. One can first opt for an ePran card and later get the physical copy of the PRAN card anytime on payment of the fee.
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