How to Open NPS Account: A Step By Step Guide

The National Pension System (NPS) is a government-sponsored pension program that aims to provide a reliable financial security net during your retirement years. By allowing regular investments throughout your working years, NPS helps you build a corpus that can support you during your golden years. As a market-linked product, NPS offers returns based on the performance of the invested funds. If you are interested in this program and wondering how to start NPS investment, the first step is to open an NPS account. This article will guide you through the process, step by step for NPS account creation.

The National Pension System was originally for government workers, but now it's available to everyone between 18 and 70 years old who follows the required identification process. Central government employees (excluding Armed Forces) who joined after January 2004 are mandatory participants, while state government employees' eligibility depends on their specific state's rules. Even private individuals are eligible to apply for NPS online or offline. So, this makes NPS a pension scheme that is applicable for businessmen as well as private individuals. Other eligibility criteria include:

• The applicant has to be a citizen of India (resident as well as non-resident Indians). Individuals coming under the Overseas Citizen of India (OCI) category can also apply.
• Individuals must be capable of legally executing contract as stated in the Indian Contract Act.

Also Read: Which is better NPS or SIP?

Under NPS, individuals have the option to open two types of accounts:

Tier I Account:

A Tier I account is a permanent retirement account where you can't withdraw money until after 15 years of service. Withdrawals are limited and can only be made in certain circumstances. It offers tax benefits and is mandatory for certain individuals.Your NPS Tier 1 account will remain active if you make a minimum annual contribution of Rs 1,000.

Tier II Account:

The NPS Tier-II account is an optional investment account. It is available to individuals who already have an active Tier-I account. It offers more flexibility for withdrawals compared to Tier-I, but it does not provide tax benefits. The minimum annual contribution for a Tier-II account is Rs. 1,000, and there is no upper limit on the amount you can contribute each year.To check your NPS statement and account balance both online and offline, you need to

• Login to the NPS account via the CRA website ( www.cra-nsdl.com ).
• Submit your user ID and password
• Once you have logged in, you need to select transaction and holding statements. These statements provide details of accumulated balance within the NPS fund
• You need to click on transaction statement and check details of transactions including any kind of contributions.

Also Read: Difference Between Tier 1 and Tier 2 NPS

Understanding the following entities will help you navigate the process of NPS account creation more effectively:

• CAMS
• Kfintech
• Protean (formerly known as NSDL e-Governance infrastructure limited)

• POP-SP (Point of Presence Service Provider) : These are authorised entities that help individuals open and manage NPS accounts. They act as intermediaries between subscribers and the NPS system.Example: Gujarat Infotech Limited, HDFC Bank Limited, Bank of India.
• : PRAN (Permanent Retirement Account Number) It is a unique 12-digit identification number allotted to each NPS subscriber. PRAN is essential for accessing and managing your NPS account.
• PFM (Pension Fund Manager): PFM is an entity registered with the PFRDA that manages the investment of NPS funds as per the specified guidelines.Example: SBI Pension Funds Private Limited, ICICI Prudential Pension Funds Management Company Limited.
• : PFRDA (Pension Fund Regulatory and Development Authority) It is the regulatory body responsible for overseeing and regulating the NPS in India.
• CRA (Central Recordkeeping Agency): The CRA is responsible for maintaining records, administration, and customer service functions for NPS. It is appointed by the PFRDA to act as a central repository of all NPS-related data.To open an NPS account online, you need to go through a CRA. There are three CRAs registered to offer online NPS account opening services ( https://npstrust.org.in/content/open-your-nps-account-online ):

Also Read: How To Withdraw Money from NPS Tier 2

Before starting the process, make sure you have the following documents ready:

• Scanned copy of PAN
• Offline Aadhar e-KYC zip file
• Scanned signature
• Scanned photograph
• Scanned copy of cancelled cheque

Further documents required for the KYC process are

• Electricity bill
• Copy of bank passbook
• ID issued by the employer
• Water bill
• Rent receipt
• Driving license
• Address authenticated by local MLA, MP, gazetted officer or municipal councillor

• Voter ID
• Birth certificate
• Passport
• Aadhaar
• Driving license
• PAN Card
• School leaving/matriculation/transfer certificate

1. Address proof:
2. Proof of date of birth

To open an NPS account, you will have to pay a one-time fee of Rs. 400 + GST. You will also have to pay a convenience fee for each transaction, which is either 0.25% of the investment amount + GST or Rs. 30 + GST, whichever is higher. Aso Read: Who is Eligible for Provident Fund?

Step 1: To open an NPS account online, you will need to choose one of the CRAs mentioned before. Step 2: Look for the option to open an NPS account online. Click on it to proceed. Step 3: Fill in the required personal details, contact information, bank account details, and nominee details in the online form. Be careful while entering the information, as accuracy is crucial. Step 4: Upload scanned copies of the necessary documents, such as proof of identity, proof of address, and passport-sized photographs, as per the website's instructions. This is where your Aadhaar and PAN will be needed. Step 5: Once you have completed the form and uploaded the documents, review all the information for accuracy. Step 6: Submit the online form. You will then be redirected to a payment page. You will need to make your initial contribution of at least Rs. 500. You can make this payment using a variety of methods, including credit card, debit card, or net banking.You will receive an acknowledgement receipt with your PRAN details on your registered email address and mobile number. Keep this receipt safe for future reference. Also Read: How is Retirement Gratuity Calculated?

Step 1: Locate a POP-SP near you. These are authorised entities that facilitate NPS account opening.You can find the list of POP-SPs on:

• PFRDA ( https://www.pfrda.org.in/poplinks.html )
• NPS ( https://npstrust.org.in/content/list-pop-registered-under-nps )

Step 2: Visit the POP-SP office and collect the NPS-1 account opening form. You can also download the form from the official website of any POP-SP or from:

• NPS ( https://npstrust.org.in/ )
• PFRDA ( https://www.pfrda.org.in/ )

Step 3: Fill out the form with accurate information. Provide your personal details, contact information, bank account details, and nominee details. Make sure to double-check all the information before submitting the form. Step 4: Attach the required documents mentioned earlier, such as proof of identity, proof of address, and passport-sized photographs, along with the filled-out form. Step 5: Submit the completed form and documents to the POP-SP. Make the initial contribution payment of at least Rs.500. You can pay the amount through a demand draft, cheque, or online transfer, as specified by the POP-SP.Once the details are verified, you will be issued a PRAN. Keep the acknowledgement receipt, which includes your PRAN, the POP-SP's name, and other important information safely. Also Read: What is Employees Pension Scheme?

With its flexibility, tax benefits, long-term savings, and the promise of pension income, the National Pension System (NPS) is an excellent choice for individuals seeking financial security in the future. By following the provided step-by-step instructions, you can efficiently establish an NPS account either online through registered CRAs or offline via authorised POP-SPs.