National Pension Scheme: Know Benefits, Online Method to Open NPS Account, Important Documents Required

National Pension Scheme: The ‘defined contribution’ scheme in India is called as the National Pension Scheme or NPS. It was launched in 2004 for government employees. In 2009, the government allowed private sector companies and ordinary people to open NPS accounts.  

National Pension Scheme: Benefits 

• The Pension Scheme works well because returns are market-linked. India is a fast-growing economy. Companies that ride on India’s economic growth are all set to grow business and profits. 

• NPS offers you a choice to use the active allocation option or auto allocation option. Many non-finance people struggle to determine factors like risk-appetite or future equity market trend. It is best to pick the auto option as funds are automatically allocated in aggressive (75% equity and 25% debt), moderate (50% equity and debt) and conservative (25% equity and 75% debt) plans.

• Besides other small savings schemes like Public Provident Fund, National Savings Certificate or Employee Provident Fund schemes have a guaranteed return. They put a burden on government finances. 

• An NPS or National Pension Scheme account can be set up online. An online platform provided by NPS Trust enables users to set up individual Tier 1 and Tier 2 pension accounts. The online facility, called the eNPSportal (enps.nsdl.com), facilitates existing or new NPS subscribers to make contributions in initial or subsequent stage, according to NPS Trust's website.  

National Pension Scheme: Simple Method to Open an NPS Account  

• The user is required to have a mobile number, an email address and a bank account with subscription to net banking facility. Own and furnish PAN details in order to set up an NPS account, according to the eNPS

• The PRAN or Permanent Retirement Account Number should be there for setting up an NPS account or managing an existing NPS account online.

• Now visit the National Pension System section on the eNPSportal- enps.nsdl.com 

• Here you will get an option of registration and contribution and activation of a Tier 2 account, under the NPS section.

• The user is required to fill up all the mandatory details, and select one from the two options: Tier 1 & Tier 2 account and Tier 1 account only)

• User is required to upload a scanned photograph along with a signature (in image form).

• Then user is directed to a payment gateway for making the payment towards the NPS account.

• After a Permanent Retirement Account Number (PRAN) is allotted, the subscriber is required to send the completed form within 30 days to the Central Recordkeeping Agency (eNPS). If user is failed to do this in due time the identification number will get freezed.

National Pension Scheme: Document requirements 

• The activation of PRAN is subject to KYC (know your customer) verification by the PoP (point of presence). 

• The name and address of the applicant need to match with the details given in the PoP record, according to the eNPS portal.

• The KYC verification is carried out by the bank or point of presence (PoP) selected by the applicant during the registration process.