Opening and Withdrawal of NPS Account

Tax saving investments are always searched by the working class to save their tax somehow. There are several tax saving investment options available such as bank FD, PPF, NSC,NPS etc. NPS is one of the tax saving investments regulated by PFRDA for the citizens of India within the age limit of 18-60. NPS is a cost effective investment and an NPS account can be opened online and offline as well. Let"s take a look on the procedure of opening an NPS account online and offline.

What is an NPS Account?

Features of NPS Account-

• An NPS account can be initiated digitally within 20 minutes.
• It can be started at just rupees 1000.
• Fees on investment is very less.
• Long term investment ( 60 years) enabling investors to remain an investor for a long span

Advantages of NPS-

• A subscriber can contribute whenever he wants in a financial year and can also decide the amount to be kept aside for saving every year.
• freedom to choose their investment option and pension fund.
• NPS can be operated from anywhere, even if they change and employment.
• NPS account is opened with any one POPs or eNPS

How to open an NPS Account Online

• To register online, go to the eNPS website at https://enps.nsdl.com/eNPS/NationalPensionSystem.html.
• Select NEW registration and select Aadhaar or PAN
• OTP will be generated to your registered mobile number, enter the OTP
• Now fill the online form with a scanned photo and signature.
• Submit the form.
• After completing the registration process, you will receive a PAN which can be used for operating an NPS account.

How to open an NPS Account offline?

• A subscriber between the age of 18-65 can get the PRAN application form from any of the Point of Presence - Service Providers (POP-SP).
• In PRAN application form all the details must be filled up with signature, photograph scheme preference. Submit KYC documentation with identity proof and address proof.
• Submit application form to the nearest Point of Presence- service provider.
• You can track your PRAN application status with the receipt number through the link given below- https://cra-nsdl.com/CRA/pranCardStatusInput.do
• You will have to make Payment of your first contribution of minimum 500 at registration with NCIS slip (all details of payment mentioned in it).

Withdrawal of NPS Account

• Maturity- At the time of maturity (60 years) 60% can be withdrawn tax free and 40% is invested in annuity. Corpus upto 5 lakh can be fully withdraw
• Premature closure of account- closure of account is permitted after 5 years and only 20% of withdrawal is tax free and remaining 80% has to be invested in annuity for pension. If the corpus is less than or equal to 2.5 lakh then the full amount can be withdrawn.
• Death- In case of death 100% of the amount is payable to the nominee
• Premature withdrawal - In premature withdrawal 25% of the amount can be withdrawn. 3 withdrawals are permitted in life, first one after the completion of months of NPS account, second and third anytime after that.