How to Open an NPS Account?

The National Pension System (NPS), an Indian government-sponsored retirement savings plan, was introduced in 2004 with the goal of ensuring financial stability after retirement. Regulated by the Pension Fund Regulatory and Development Authority (PFRDA), NPS allows individuals to contribute regularly to a pension account and withdraw a portion at retirement while using the rest to purchase an annuity for a steady income. 

For an NPS account opening, start by visiting the official NPS website or contacting a Point of Presence (PoP) that is authorized by the Pension Fund Regulatory and Development Authority (PFRDA). You will be required to complete an application form and submit identification documents such as your Aadhaar card, PAN card, and address proof. Additionally, you need to provide biometric verification and an initial deposit to activate your account. Once your account is established, you can manage it online, make periodic contributions, and choose your investment preferences. The NPS account opening process is straightforward and aims to ensure a secure financial future, making NPS an attractive option for long-term retirement planning.

Benefits of Opening an NPS Account

The NPS is a voluntary, long-term retirement savings scheme designed to provide financial security post-retirement. It is an efficient, low-cost investment option that helps individuals build a robust retirement corpus while offering tax benefits and market-linked returns. Below are the key benefits of opening an NPS account:

1. Portability
   The NPS scheme offers seamless mobility across jobs and locations. Unlike many other pension plans in India, it allows individuals to switch employers or relocate without losing their accumulated savings.
   

2. Regulated and Transparent
   NPS operates under the strict regulation of PFRDA, ensuring reliability and security. The NPS Trust continuously monitors fund managers' performance, and its account maintenance charges are among the lowest compared to similar global pension schemes.
   

3. Attractive Tax Benefits
   

   • Tax deductions of up to ₹1.5 lakh are available under Section 80CCD(1), with salaried employees eligible for deductions up to 10% of their salary and self-employed individuals up to 20% of their gross income.

   • Employer contributions to NPS fall under Section 80CCD(2) and do not count toward the ₹1.5 lakh limit under Section 80C (not applicable to self-employed individuals).

   • An additional ₹50,000 deduction is available under Section 80CCD(1B) for voluntary self-contributions, bringing the total possible tax benefit to ₹2 lakh.

Eligibility Criteria for NPS

Before delving into eligibility details, you must know the NPS accounts are divided into two tiers: 

Tier-I

This is a compulsory retirement account where the subscriber’s regular contributions are deposited and invested as per the chosen fund manager or portfolio. It is designed for long-term savings and has withdrawal restrictions until retirement.

Tier-II

This is an optional savings account accessible only to those with an active Tier-I account. It offers flexibility, allowing withdrawals of any amount, including the entire balance, at any time.

Here are the details of who are eligible for an NPS account opening:

However, you must keep visiting the NPS official site for recent updates regarding the rules or other criteria. 

Step-by-Step Guide to Open NPS Account Online

Opening an NPS account online is a simple and hassle-free process that allows individuals to start investing for their retirement in just a few steps. However, to avoid any difficulty, you must know how to fill out an NPS form online. By following the instructions below, you can quickly register and access the benefits of the National Pension System.

1. Visit the official National Pension System website.

2. Navigate to the ‘National Pension System’ tab.

3. You will be redirected to a registration page—carefully fill in the form with your details.

4. Link your account with your PAN card, Aadhaar card, and mobile number for verification.

5. Click on ‘Generate OTP’ and enter the received OTP to authenticate your registration.

6. Once completed, your Permanent Retirement Account Number (PRAN) will be generated.

7. Use PRAN to log in and manage your NPS account for future transactions.

This streamlined process ensures that individuals understand how to fill out an NPS form online without making any mistakes and can start securing their financial future with ease.

Apart from the online process, you may also open an account using the offline mode. Here are the steps for the same: 

1. Locate a Point of Presence (PoP) branch near you.

2. Visit the branch and collect the NPS account opening form.

3. Fill out the form and submit it along with the required KYC documents.

4. Choose your preferred minimum contribution:

   • ₹250 (monthly)

   • ₹500 (monthly)

   • ₹1,000 (annually)

5. Pay a one-time registration fee of ₹125 to complete the process.

6. Once registered, the PoP will issue your Permanent Retirement Account Number (PRAN).

7. You will receive a sealed welcome kit containing your PRAN and login credentials, allowing you to manage your account.

This simple process ensures a smooth and secure way to start your National Pension System journey offline.

Documents Required for NPS Registration

Knowing only how to start an NPS is not enough, to open an NPS account, you must provide certain documents for identity verification and compliance with regulatory requirements. Whether applying online or offline, submitting the necessary documents ensures a smooth registration process. Below is a list of essential documents required for NPS registration:

1. Identity Proof (Any One)

• Aadhaar Card

• PAN Card

• Passport

• Voter ID

2. Address Proof (Any One)

• Aadhaar Card

• Utility Bills (Electricity, Water, or Gas – not older than 3 months)

• Passport

• Rental Agreement

3. Date of Birth Proof (Any One)

• Birth Certificate

• Passport

• 10th Class Certificate

4. Bank Account Details

• Canceled Cheque

• Bank Statement

5. Photograph & Signature

• Recent Passport-size Photograph

• Scanned or Physical Signature

Providing these documents ensures a hassle-free registration process, allowing you to start building your retirement savings with NPS.

NPS Account Opening Charges

NPS is a cost-effective retirement savings plan regulated by PFRDA. While it offers low fund management fees, certain charges apply when opening and maintaining an NPS account. Below are the key charges associated with NPS registration:

Disclaimer: The revision of PoP service charges for subscriber registration has been effective since February 1, 2022.

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