Wednesday, July 15, 2020

What is NPS (National Pension System), Types of NPS , Account opening Process, PRAN CARD

What is NPS (National Pension System), Types of NPS , Account opening Process, PRAN CARD, who should invest in it and Benefits?



National Pension System i.e. NPS is the retirement saving scheme of the government. It was launched by the central government on 1 January 2004. This scheme is necessary for all government employees joining after this date. Since 2009, the scheme has also been opened to people working in the private sector.

Any Indian citizen whose age is between 18 and 60 years can join it. It is necessary to follow KYC rules to join this scheme.

Now any employee working in the private sector along with the government can join this scheme on their own free will. After retirement, employees can withdraw a part of the NPS and from the remaining amount can take an annuity for regular income after retirement.

Conditions of joining NPS

What is NPS (National Pension System), Types of NPS , Account opening Process, PRAN CARD

 Any Indian citizen who is between 18 and 60 years of age can join it. To join this scheme, it is necessary to follow KYC rules.

Who should invest in NPS?

 As stated, it is a retirement scheme. So, one should invest in this keeping in mind the long term. You can close your account when you retire. While closing it, you can withdraw some money outright. You will have to buy an annuity plan with the remaining money.

Under the annuity plan, you pay a lump sum money to an insurance company and in lieu of this, you get a full life pension. 

NPS account is portable.


 That means it can be shifted. This means that there is no need to open a new account. It needs to change jobs


What are the types of NPS accounts?

What is NPS (National Pension System), Types of NPS , Account opening Process, PRAN CARD

National Pension System is the retirement saving scheme of the NPS government. In this, both government and private employees can join as they wish. After retirement, employees can withdraw a part of the NPS and from the remaining amount can take an annuity for regular income after retirement. NPS account is of two types. These include Tier-I and Tier-II accounts. Each Subscriber is provided with a Permanent Retirement Account Number (PRAN), which has a 12-digit number. This number is used in all transactions. Let's see about these two accounts here.

It is mandatory to open this account under Tier 1 account NPS scheme. Whatever money you are depositing in this account, you cannot withdraw it before retirement. When you go out of the scheme, only then you can withdraw its amount. In other words, money cannot be withdrawn from this account before maturity. 

Tier 2 account Any Tier 1 account holder can open this account and can deposit and withdraw money at his / her choice. This account is not mandatory for everyone. It depends on your wish.
A Tier 2 account cannot be opened without a Tier 1 account. That is, you cannot open an NPS Tier 2 account only.

What is NPS (National Pension System), Types of NPS , Account opening Process, PRAN CARD

There is a PRAN for both accounts
The same PRAN is for both accounts. These two accounts are linked to a PRAN.

Tier 1 account is important

As mentioned, Tier 2 account cannot be opened without Tier 1 account. That is, you cannot open an NPS Tier 2 account only. When you close NPS Tier 1 account, Tier 2 account also has to be closed.

Multiple restrictions with Tier 1 account

A Tier 1 account is a retirement account. So, there are many restrictions on withdrawal before maturity. You can withdraw up to 25 percent of your contribution after 10 years of opening an account for children's education, marriage, treatment of serious diseases and construction of first house.

No restrictions with Tier 2 account

There is no restriction on investment in Tier 2 account. One can withdraw the entire amount in lump sum.

Tax Benefit on accounts


Tax benefits are available on investments in NPS accounts. Under section 80CDC (1), 80CDC (1B) and 80CDC (2), the benefit is only on investment in NPS Tier 1 account. Tax rebate up to Rs 1.5 lakh can be availed under section 80C for investing in Tier 2 account.



How to open a NPS account?

What is NPS (National Pension System), Types of NPS , Account opening Process, PRAN CARD

There are two types of accounts in this scheme. Tier-1 and Tier-2. It is mandatory to open a Tier-1 account.
Whoever is depositing money in this account, cannot withdraw it before retirement.

Retirement planning is a must for everyone. There are many options for this. National Pension System i.e. NPS is one of them. Any person can make regular contributions to the pension account during their working life. Let's see here how to open this account.

The government has made point of presence (PoPs) across the country. NPS account can be opened in these. Almost all the government and private banks in the country have been made POPs. You can also access the Point of presence https://www.npscra.nsdl.co.in/pop-sp.php through the website of the pension regulator PFRDA. An account can also be opened in the nearest branch of any bank.

These are the necessary documents to open an account

1. Address proof
2. Identification proof
 3. Birth certificate or tenth grade certificate
 4. Subscriber Registration Form


How to open an account online?

What is NPS (National Pension System), Types of NPS , Account opening Process, PRAN CARD

 To open NPS account online, you must first log in to the official website of ENPS. After this, the online subscriber registration page will open up. On this page, the user has to click on the link for new registration. An OTP will be generated by entering your virtual ID number here. This OTP will come on the registered mobile number of the user.
What is NPS (National Pension System), Types of NPS , Account opening Process, PRAN CARD

After inserting the OTP, the user has to click on the button of Continue. After this, the user will have an enrollment number generated. With this, the username will also be there. On pressing the OK button, the user has to fill his personal details. Then the bank details will be sought from the user. After this a permanent retirement account number ie PRAN will be found. With this help you can log in to NPS


What is offline process?


To open an NPS account offline, a person must first find the point of presence. A Subscriber form has to be obtained from your nearest POP. It has to be submitted along with the KYC documents.

You get PRAN from POP on initial investment. It is 12 digits. With the help of this number and password, you can run your account. For this process one time registration fee of Rs 125 will have to be paid.


NPS account can be opened with the help of OTP, PFRDA launched service.

What is NPS (National Pension System), Types of NPS , Account opening Process, PRAN CARD

Under the new facility of PFRDA, shareholders can now open their NPS account through OTP (One Time Password)

Pension fund regulator PFRDA said on Monday that it has introduced a 'one-time password' facility to join the National Pension Scheme (NPS). Pension Fund Regulatory and Development Authority (PFRDA) is already providing online NPA account facility through e-signature without any paper documents.
  
 Under the new facility of PFRDA, shareholders can now open their NPS account through OTP (One Time Password). 
            In this, if the customers of the bank registered for POP (Point of presence) want to open NPS account through Internet banking of the concerned bank, then they can open the account by getting OTP on the registered mobile number.

Non-Internet Banking 'OTP and e-mail received on the mobile number of the concerned customer can be used to open an NPS account for any paper documents through digital medium ie POP. 
                   After completion of KYC (Know Your Customer) the POP will have to provide information / information about NPS shareholders to the Central Record Keeping Agencies (CRA) along with the photo and signature image of the customer. They must provide in writing that KYC guidelines / rules have been followed.
       
The pension fund regulator said that POP and CARA have been asked to provide necessary verification services based on OTP. According to the regulator, it will be easier for the shareholders to open an account. 
   
     PFRDA is regulating the accounts of 3.60 crore shareholders under the National Pension System. Under this, the total assets under management is Rs 4.55 lakh crore. Of the total shareholders, 2.25 crore are associated with the Atal Pension Yojana



NPS account to be opened?


 Know how much you can save with e-PRAN facility, if the subscriber opts for e-PRAN while joining the scheme and later wants a PRAN card, he can do so by paying the applicable fees.

Pension fund regulator PFRDA has started a special facility for the people. This will reduce the cost of opening a National Pension System (NPS) account. The regulator has introduced an additional option for subscribers. 

Through this, e-PRAN with Welcome Kit can be found online. Subscribers can save from Rs 22 to Rs 35 by choosing to get Permanent Retirement Account Number (PRAN) through email.
  
     PFRDA has issued a release in this regard on 30 June 2020. In this, he said that a decision has been taken to allow people to manage the account opening charge according to their own. This account opening fee is paid to the Central Record Keeping Agency (CRA)

It has been decided that customers can choose to choose physical PRAN or e-PRAN (PRAN received through e-mail). They will also have the option to receive the welcome kit via physical or email

What is PRAN?

PRAN is a special 12-digit number. This is given to the NPS Subscriber on joining the scheme. Currently, under NPS, subscribers are given physical PRANs with welcome kits.

No difference between the two.

 PFRD has clarified that there is no difference between the physical or e-PRAN cards. These will be treated as equivalent in processing related to identification, servicing, exit or any other NPS.

You can also take a card later

If the subscriber opts for e-PRAN while joining the scheme and later wants the PRAN card at any time, he can do so by paying the applicable fees. In the context of PRAN cards, all CRAs have been advised to develop a system for registering the choice of subscribers.

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