Earlier, opening a National Pension System scheme account was intricate. However, with the inception of eNPS, opening an online NPS account doesn’t take more than 30 minutes if you have all your documents ready. eNPS has made the process easier, more seamless, and time-saving. Therefore, now, people don’t have to worry about opening an NPS account and wondering to be a big hustle.
Although one can open an NPS account online, we are going to cover both the processes of account opening i.e. online & offline methods so that those who aren’t tech-savvy can simply opt for an alternative process.
However, before we dig our foot into account opening, it’s important to understand the National Pension Scheme. So, let’s start with the NPS definition-
NPS, also known as the National Pension System scheme, is a voluntary social security scheme that can be opened both online and offline. The scheme is regulated under the jurisdiction of the Pension Fund Regulatory and Development Authority (PFRDA). It aims at offering monetary benefits in the form of a pension or one can say, post-retirement.
In 2014, the central government launched the new pension scheme (NPS) - a social security scheme that is a contribution-based scheme offering market-related returns to pensioners.
As already mentioned above, the operations of NPS are regulated by the PFRDA. To open an NPS account, you can choose either an online method or an offline method. We have described both of them step by step and individually.
Let us start with the online method:
It’s very simple for individuals to open an NPS account online.
Step 1: Firstly, visit the eNPS website to register your account online.
Step 2: Link your mobile number, Permanent Account Number (PAN), and Aadhaar number with the NPS account.
Step 3: You will receive an OTP on your registered mobile number. This is to complete the validation.
Step 4: Once the registration is completed, you will receive a Permanent Retirement Account Number (PRAN). You can use this number to log in to your NPS account.
Post offices and central banks are appointed as PoP (Point of Presence) where you can open an NPS account.
So, what are you supposed to do to open an NPS account offline?
Simple, follow the steps described below.
Step 1: Locate the nearest PoP and get an NPS subscriber form. After filling up the subscriber form, submit it with photocopies of your KYC documents such as PAN card, Aadhaar card, passport, etc.
Step 2: In case you are an existing bank’s customer, then you are required to submit the KYC documents as they may already have your KYC details in their database.
Step 3: Make an initial deposit of a minimum of Rs. 500 (excluding tax). The minimum contribution to Tier 1 NPS account is Rs 1,000 in a year. You are also supposed to make a one-time registration fee payment.
Step 4: The PoP will provide you with the PRAN number. The welcome kit will have the PRAN and password. You can use them to operate your account online.
You can log in to your NPS account online either via the NSDL NPS portal or your internet banking account.
Finally, we are here with your most awaited question- what are NPS benefits? Well, there are a plethora of benefits that an NPS account may offer. Some of them are as follows:
Simple: It’s quite simple to open an account with NPS. Upon opening, it will provide you with a PRAN which will remain with you throughout the lifetime.
Flexible: It renders a range of investment options and choice of Pension Funds (PFs) for projecting the growth of the investments in a reasonable way and tracking the growth of the pension corpus. Subscribers can easily switch over from one investment option to another or from one fund manager to another.
Well-Regulated: Another amazing benefit of NPS is that it is regulated by PFRDA having transparent investment norms and offering regular monitoring and performance review of fund managers by NPS Trust.
Ease of Access: Since you can now manage an NPS account online, it’s easy to access it via the eNPS portal.