NPS scheme: Eligibility, Benefits & Registration Process

NPS is the National Pension System. It's a retirement savings scheme. Here the contributions are made towards planned savings. The role of this scheme is to have a source of income after retirement. PFRDA regulates NPS. The NPS scheme has been in effect since January 1, 2004. But in 2009 Pension Fund Regulatory And Development Authority(PFRDA) acquired NPS.

Here the returns are higher than the PPF and EPF. It comes under the exempt category. To open an NPS account you don’t need to be an employee of an organisation. 

Eligibility

1. Be an Indian Citizen.

2. Age Between 18 and 70. 

3. Every NPS account holder has a 12-digit unique number known as PRAN (Permanent Retirement Account Number).

Benefits of the NPS scheme

Tax Benefits:  NPS account holders can claim tax deductions on contributions.

Retirement Benefits: NPS provides a lump sum after retirement.

Flexible Investments: Provides the option of auto choice and active choice for managing the investments.

Low cost: The maintenance cost of NPS is low.

Transferability of Account: It's easy to transfer the account from one place to another.

Types Of Accounts

1. Pension Account: In this type of NPS account the amount is not withdrawable. The amount is only available after retirement. The account holder can only withdraw 3 times from this account only in case of emergency. It is known as a Tier 1 account.

2. Investment Account: Here along with the savings investments are also done.  The account holder decides how much percentage of the amount will go into equity, government securities, corporate bonds, and alternate investment funds.

Here are two types of choices in an investment account:

1. Active Choice: In active choice, the investor himself can decide where to invest.

2. Auto Choice: In the auto choice the fund manager is responsible for the management of the funds in an account. There are three types of Auto Choice :

1. Aggressive Auto Choice:  In this type of auto choice 75% is in equity, 10% corporate, and 15% Government.

2. Moderate Auto Choice: Here the distribution of funds takes place like 50% Equity, 30% Corporate, and 20% Government.

3. Conservative Auto Choice: Here the distribution of funds takes place like 25% in Equity, 45% in  Corporate, and 30% in Government.

The NPS account holder can add 3 Nominees. Also, change in nominees can also happen. There is also a share percentage like how much share a nominee can get from 100%.

Active Fund Managers in NPS

1. SBI Pension Fund Private Ltd.

2. Tata Pension Management Private Ltd.

3. UTI Retirement Solutions Ltd.

4. LIC Pension Fund Limited.

5. ICICI Pru Pension Funds Management Company Ltd.

6. DSP Pension Fund Managers Private Limited.

7. Axis Pension Fund Management Limited.

8. Aditya Birla Sun Life Pension Management Limited.

9. Kotak Mahindra Pension Fund Limited.

10. Max Life Pension Fund Management Ltd.

How To Open an NPS Account

Steps To Open an NPS Account Online :

1. Visit the Protean website.

2. Click on “Register Now”.

3. And select the suitable option.

4. A pop-up will appear, enter your DOB, PAN, Mobile number, and Email ID.

5. Click on “Begin Registration”.

6. On the next page Choose the option “Register with” then select the preferable Aadhar option.

7. Tick mark “T&C” and click “Accept”.

8. Click on “Generate OTP” and enter Mobile and email OTP for verification.

9. On the next page ACK ID Generated then click on “CONTINUE”.

10. On the next page Verify Details and click on “Confirm”.

11. Select the investment options Auto or Active. Add Bank Details and nominee details.

12. Click on “Proceed”.

13. Enter your personal account details and click on Proceed.

14. Select OTP auth. and enter Mobile OTP and Email OTP.

15. Make your Contribution page appear and click “Confirm Payment”.

16. The PRAN number will come in your email.

17. IPIN for eNPS click Generate OTP, enter PRAN, DOB, New Password, confirm password and enter Captcha.

18. Click on “Submit”

Also, Check - Mudra Yojana: Products, Eligibility Criteria & Benefits

Conclusion

So the NPS scheme helps save money. It also provides investment options. Apply for NPS and get a stable income after retirement. In general helpful for people during old age so that they can secondary source of income.  So this explains the National Pension System.