National Pension System (NPS) is a pension saving and investment strategy that allows you to plan for your retirement age. The Scheme is governed by the Pension Fund Regulatory and Development Authority (PFRDA), and any Indian citizen, both resident, and non-resident, between the ages of 18 and 70 can join in NPS. In this scheme, both government sector and private sector employees can join for good market-linked returns along with tax breaks. So, let's discuss how to open an NPS account with the country's largest lender State Bank of India (SBI), and what are the benefits of investing in NPS.
Eligibility required to join in NPS
- An Indian citizen, whether a resident or a non-resident can join in NPS.
- As of the date of filing of his/her application to the POP/ POP-SP, the applicant must be between the age group of 18 and 70.
- The applicant must follow the Know Your Customer (KYC) guidelines laid out in the Subscriber Registration Form. All of the necessary documents for KYC adherence must be provided.
- NPS coverage is mandatory for all workers of Central Autonomous Bodies hired on or after January 1, 2004.
- Employees of a corporate organization who are recruited by the company and have Indian citizenship between the age group of 18 and 60 are eligible to become NPS subscribers if they meet the KYC standards.
A subscriber is responsible for the following charges if subscribing and/or transacting through a Point of Presence (POP)/Bank. Individuals must note that service tax and other charges, if any, shall be charged in accordance with current tax legislation and Tier - II account holders are not excluded from additional CRA charges.
|Type of service||Service charges to be paid to the Point of Presence (POP) by the Subscriber (excluding GST)|
|Initial Subscriber Registration/per subscriber||Rs .200/-|
|Initial Contribution amount / per subscriber||Ad valorem 0.25% of the contribution amount (Minimum: Rs.20/- & Maximum: up to Rs.25000/-)|
|Subsequent Contribution Transaction Charge/ per subscriber||Ad valorem 0.25% of the contribution amount (Minimum: Rs.20/- & Maximum: up to Rs.25000/-)|
|Any other transaction not involving a contribution from subscriber/ per subscriber||Rs. 20/-|
|Persistency||Rs 50/- per annum (only for NPS- All citizen model) - recovered through cancellation of units|
Steps to open an NPS account with SBI
Individuals can open either a Tier I - Pension account, which is a mandatory account with tax advantages, or a Tier II - Investment account, which is an optional account with no tax benefits but a corpus that can be withdrawn at any time up to Rs. 50,000/- per fiscal year. Tier I requires a minimum contribution of Rs.500, whereas Tier II requires a minimum contribution of Rs.1,000. By following the steps listed below, individuals can open an NPS account through SBI YONO.
- Open the SBI YONO app on your mobile phone and head to the 'Investments' section. Or else subscribers can also visit www.onlinesbi.com and click on 'NPS Contribution', which is available under 'Payments/ Transfers' menu. Subscribers can enroll in NPS by visiting their local State Bank of India branch and submitting an NPS Contribution Instruction Slip (NCIS) along with the required contribution amount.
- Now tap on 'NPS Account Opening' or http://onlinesbi.co.in
- Now tap on 'e-Services' and then select the 'NPS Registration' or 'Nearest SBI Branch' option.
- Now enter the required details for registration and make the mandatory contribution for effective application.
- Subscribers can choose a Pension Fund Manager (PFM) after successfully creating an account which can be altered only once per financial year. Subscribers can also choose their asset allocation, which can be modified 2 times in a fiscal year.
- It should be noted that subscribers can specify Standing Instructions (SI) or limousine Debit instructions for handling their monthly contributions either online using the 'NPS Contribution' option at www.onlinesbi.com or by submitting an application form by physically visiting their nearest and registered bank branch.
Get a future that's not only secured but also financially stable with National Pension System (NPS) scheme by SBI.— State Bank of India (@TheOfficialSBI) September 30, 2021
To register visit: YONO App > Investments > NPS Account Opening or https://t.co/15Pn1hMUVI >e-Services > NPS Registration or Nearest SBI Branch#NPS #NPSDiwas pic.twitter.com/oAMDST4K2l