A defined, voluntary contribution scheme put forth by the Government of India, this retirement scheme aims to provide a solution to various retirement woes experienced by workers in the country. NPS stands for National Pension System.
Under this scheme, individual’s savings are put into a pension fund which is then invested by fund managers approved by the PFRDA or the Pension Fund Regulatory and Development Authority into various portfolios of bills, shares, government bonds and so on. This would then grow over the years based on the returns made as part of the investment.
There two ways through which individuals can open an NPS account - offline or online.
Offline Procedure to Open NPS Account
In order to open an account offline, they would have to follow the steps mentioned below -
- Customers will first have to find a PoP or Point of Presence which helps individuals subscribe to the scheme, carry out verifications and also receive contributions for NPS.
- Individuals will have to first fill up an application form and provide required documents. The minimum amount that individuals can contribute is Rs. 500 and a PRAN which stands for permanent retirement account number is provided.
- A welcome kit will also be provided with the required passwords.
Online Procedure to Open NPS Account
Individuals can also apply online by following the steps provided below. This process is also a lot more convenient now as they can use their PAN card, Aadhaar card to register through an even more simplified process.
- Individuals will have to first visit the NPS Trust website and register by either using their PAN number or Aadhaar number.
Open NPS Account Online using PAN Card
- If individuals are using their PAN number, then -
- They will have to provide their mobile number, email address and bank account which has a net banking facility. The PAN number option can only be used in about 15 banks that have been empanelled with PFRDA.
- KYC verification will be done once documents are provided. Additional address verification documents will have to be provided as well. A fee of Rs. 125 will be charged by banks for KYC.
- This process might result in certain details as interbank verification might need to happen.
Open NPS Account Online using Aadhar Card
- If individuals are using their Aadhar number then -
- Customers will need to provide their Aadhar number post which an OTP or One Time Password will be sent to the mobile number that has been registered in the Aadhar account.
- Once this is verified, details about the bank will have to be provided and an initial payment will have to be made.
- A digital signature and photograph will have to be uploaded. However, with Aadhaar, a photograph will appear directly.
- A contribution will have to be made. Individuals also have the option to invest online.
- After the above processes are complete, individuals will have to print the NPS form, paste a photograph, ensure that they sign the form and submit it this to the National Securities Depository Ltd or NSDL within a period of 90 days.
The above facility can also be used by NRIs or Non Resident Indians.