As in any pension plan, you invest in your retirement scheme in this scheme. Your NPS account gradually grows with your investment and the NPS returns on it.
You get the pension after retirement. By retiring, I mean getting 60 years of age or getting your employer’s superannuation.
You can close your account if you retire or at the age of 60 years. When closing the account, you can withdraw a few lumps of money. With the money left you will have to buy an annuity plan.
NPS can avail the benefits of this service through the site of NPS Trust www.npstrust.org.in. Through this site, prospective subscribers can register their online NPS registration. You can do your own contribution in your retirement account. One can directly contribute to their account, which already has an NPS account.
A subscriber has to give his name and PAN number for online registration in NPS Trust. After this, it will be approved by the online Income Tax Department. After this, the subscriber bank has to be selected. It will have to upload personal information, photos and signatures. After giving all information, the subscriber will be able to contribute to his NPS account through his net banking. Once the payment is made, the subscriber will get the PIN number. After this, the subscriber has to print the form, he will have to sign his photo, signature and submit it.
How to open an NPS account?
There is an offline process where you need to go to PoP (Point of Presence). You can also open an NPS account by going to your bank. A lot of banks make this facility available.
If you do not feel like going to your bank branch, you can open an NPS account while sitting at home.
There are several ways to open an online NPS account.
You can go online portal like ICICIDirect and open an NPS account.
You can go to eNPS’s website and open your account in two ways –
Using a combination of PAN and bank account details.
Using your Aadhar card
eNPS portal. Choose the registration option.
You will be asked to enter your Aadhar number. You will get One Time Password (OTP) on the Aadhar registered mobile number. You can open both NPS Tier-I and NPS Tier-II accounts simultaneously. According to me, there is no need to invest in the NPS Tier-2 account. Tax Benefit is available only on investing in NPS Tier-I account.
After that, you provide your information. A lot of information will be automatically filled with information from your base (auto-populated). Enter personal, contact, bank account and nomination details.
You will be asked to select the pension manager. You will be asked to choose an investment option (Auto or Active). If you choose Active, then you have to specify the allocation of equity (E), corporate debt (C) and Government Debt Securities (G).
Sign and upload photos. Photos will be uploaded by the Aadhar card by default. If you want, you can upload a different picture. You will also need to upload a copy of your signature. You can sign an empty page. Take a picture or scan and upload the signature.
You can go ahead and make initial contributions. The minimum contribution is 500 rupees. You can pay by net banking, debit card or credit card. Your PRAN will be generated instantly. Note PRAN will only occur when you invest money.