National Pension Scheme (NPS) is a beneficial scheme launched by the Government of India to protect the interests of people who have reached the age of retirement. Know here NPS rules, NPS account opening process and more.
Financial security is a basic necessity which motivates a person to lead a stress free life. A person who has secured good financial corpus for his retirement becomes self-reliant and free from dependence on other earning members of the family.
In fact, planning for retirement is an imperative decision if taken at an early age as there is a constant supply of money for the future even in the unpredictable rainy days of life.
Therefore, in order to protect the financial interests of citizens reaching retirement age, and to promote a systematic savings pattern, the Government of India (GoI) has decided to provide retirement benefits to people working in both the organized and unorganized sectors. A National Pension Scheme (NPS) initiative has been launched. .
NPS is regulated and administered by PFRDA or Pension Fund Regulatory and Development Authority (PFRDA) under the PFRDA Act 2013.
NPS – Important Highlights
Contributions made under NPS accrue till the age of retirement and individual investors cannot exit the scheme until they reach the age of superannuation.
Once a person reaches the age of retirement/retirement, he/she can withdraw 60% (lump sum) of the contribution and the remaining 40% is used to get lifelong pension. It is mandatory to set aside at least 40% of the corpus to get regular pension from a PFRDA-registered insurance firm.
It is to be noted that 60% of the amount that can be withdrawn is now tax-free as announced by the Government of India.
Who is eligible for NPS
The NPS pension program is applicable to employees in the public, private and even unorganized sectors, except for those serving in the armed forces.
To register for NPS, it is also necessary to verify your KYC with the bank
NPS Registration Process
The registration for NPS can be done both online and offline depending on the convenience of the interested and eligible beneficiary:-
Individuals can register for the National Pension System (NPS) through the online platform eNPS and get membership of the scheme.
Have a look at the steps given below to register for NPS through online mode:-
Step 1 – Visit the official website of ENPS portal.
Step 2 – Select your customer type i.e. ‘Individual Customer’ and ‘Corporate Customer’.
Step 3 – Select your residential status, Citizen of India and ‘NRI’.
Step 4 – Select the account type (Tier I account or Tier II account)
Step 5 – Enter your PAN details and bank account details and try to open an account from the back with which you have already done KYC verification, this will ease the verification.
Step 6 – Keep ready the scan copy of your PAN card along with the canceled check as it needs to be uploaded online on the official NPS website.
Step 7 – Also keep your scanned photograph and signature ready for upload.
Step 8 – In the last step, it is necessary to make payment through Net Banking/ Debit Card for applying to NPS account.
Step 9 – After making the payment, the applicant will receive the Permanent Retirement Account Number (PRAN) which will be generated shortly afterwards.
It is to be noted that NRIs are also eligible to apply for an NPS account.
