National Pension System (NPS)

Secure income for your old age with this investment tool that offers market-based returns

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National Pension System

National Pension System (NPS), is an investment tool designed to help you save money while you are employed and ensure a regular stream of income post-retirement. Backed by the Indian government, NPS is designed to suit the varied requirements of different classes of citizens. NPS offers the opportunity to invest in asset classes such as equity and debt and offers market-linked returns. Additionally, tax saving is another inherent feature of this investment avenue that is regulated by the Pension Fund Regulatory and Development Authority (PFRDA). Read more to learn about this retirement planning tool, its features and benefits, and other details.

Secure Income for Old Age

Choice of Investment Models

Two Account Options

Dual Benefit for Investors

Features & Benefits of National Pension System (NPS)

Ensure income security in your old age

Portable

Low cost of investment

Prudently regulated by PFRDA

Choice of funds, fund managers and investment options

Exclusive Tax Benefit

Increase / decrease the investment amount for the year

Select different asset allocation, scheme preference and pension fund manager for Tier I and Tier II accounts

Nominate different nominees for their Tier I and Tier II accounts

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All Citizens Model

This model is applicable to all Citizens of India and NRIs falling between the age group of 18 years to 70 years. Under NPS, two types of accounts are available to the subscriber - Tier I and Tier II. The contributions in Tier I account are savings for retirement and are non-withdrawable. Tier II account is a voluntary saving account.

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Corporate Sector Model

Corporate may join NPS through MOUs with any one of our existing authorized branches

The employees will come under NPS within the purview of employer-employee relationship

Corporates can co-contribute for employees’ pension, select PFM for its employees

Employer can claim tax benefit for the amount contributed towards pension of employees’ upto 10% of salary (Basic+DA) under ‘Business Expense’

Employees contribution is eligible for tax exemption as per the Income Tax Act, 1961

Additional deduction for investments up to Rs 50,000 can also be availed

Under the Corporate plan, registered employees (subscriber) have individual PRAN, portability across employment, sector and geography

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Contribution

To know more please, Click here For Contribution.

Scheme Preference

To know more please click here For Scheme Preference

Withdrawals

Tier 1 - The applicant shall contribute his/her savings for retirement into this restricted withdrawable account. This is the retirement account and applicant can claim tax benefits against the contributions made subject to the Income Tax rules in force.

Tier 2 – Opening of this account is optional for investment purpose. The subscriber has the flexibility to can withdraw from this account as per their requirements

**Failing minimum investment criteria leads to freezing of PRAN account as per the guidelines of PFRDA

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Fees and charges of NPS

Intermediary	Request Type	Charges*	Frequency of Charges and Mode of Deduction
Point of Presence (PoP)	Subscriber Registration	₹400/-	One-time, collected upfront
	Contribution Processing	0.50% , min ₹30/- and max ₹25000/-	Each transaction, collected upfront
	e-NPS Contribution Processing	0.20%, min ₹15/- and max. ₹10,000/
	Non-financial Service Request	₹30/-	Each request
	Persistency Charges	₹50/- (₹1000-₹2999), ₹75/- (₹3000-₹6000), ₹100/- (>₹6000)	Annual, through unit cancellation
	Withdrawal	0.125% of the corpus, min ₹125/- and max ₹500/-
Protean (NSDL) / Kfintech	New Account Opening (Physical PRAN card)	₹40/- (NSDL), ₹39.36/- (Kfintech)	One-time, through unit cancellation
	PRA Maintenance	₹69/- (NSDL), ₹57.63/- (Kfintech)	Annual, through unit cancellation
	Financial/Non-financial Transactions	₹3.75/- (NSDL), ₹3.36/- (Kfintech)	Each transaction, through unit cancellation
Pension Funds	Investment Management	Up to 0.09% of AUM	Adjusted from NAV
Custodian	Asset Servicing	0.000000001770% of AUM
NPS Trust	Trust Management	0.003% of AUM
Trustee Bank	Trustee Bank Charges	No charges

* The above charges are exclusive of GST.

Steps to open NPS Account Online

You can start your retirement planning and save for your retirement corpus by opening an NPS account online using these simple steps:

1. Visit the NPS Website: Go to the official NPS website or visit a Point of Presence (POP) like a bank for a new NPS Account opening.

2. Choose the type of account: Select the type of pension account between Tier I and Tier II and create an NPS account. Note that a Tier I account is mandatory for opening an NPS account.

3. Select the Pension Fund Manager: There are 11 Pension Fund Managers (PFM) listed under the NPS; choose the preferred one.

4. Select the mode of investment: You can choose between two modes - Auto and Active. If you opt for Auto Choice, your portfolio will be adjusted based on the current trends, and if you go for Active Choice, you can choose the assets yourself.

5. Complete the registration form: Fill out the online registration form by entering your personal details, contact information, and nominee details.

6. Submit KYC documents: Provide Know Your Customer (KYC) documents, which include identity proof, address proof, a photograph, etc.

7. Make the initial pension contribution: Deposit the first pension contribution amount as specified by the chosen type of account. For example, the minimum contribution for a Tier I account is ₹500.

8. Receive PRAN: After you submit your details successfully, you will receive a Permanent Retirement Account Number (PRAN), which is required for future reference.

Registering via Axis Bank NPS Portal

You can also create an NPS account through the Axis Bank website. Here are the steps to follow:

Go to Axis Bank’s official website.
Go to the National Pension System (NPS) page, listed under the dropdown menu of “Explore Products”.
Click on “Apply Now” and accept the terms. After that, it will take you to a third-party website to complete the registration process.
Read the instructions carefully and complete the registration using your preferred method. You can complete the registration using:
- Aadhaar Paperless Offline e-KYC
- Aadhar or Driving License through Digilocker

Steps for logging into your NPS Account online

To access your account, you will have to log in to the NSDL or Kfintech, which are the two official Central Recordkeeping Agencies (CRA) for NPS. You can log in to NPS open online using the following steps:

Go to the official eNPS online website and go to the login page.
Enter your 12-digit Permanent Retirement Account Number (PRAN), which you receive after a successful registration.
Enter your date of birth, click on Set Password, and confirm the entered password.
An IPIN will be generated for logging into your account.
Go to the NSDL NPS online page and select the option to log in with IPIN.
Enter your PRAN or IPIN to proceed to access your NPS pension policy account.

Frequently asked questions (FAQs)

What is the NPS pension scheme?

The NPS pension plan is a pension reform tool designed to enable every citizen of this country to invest for their retirement and enjoy the benefits at pension maturity. It is a government scheme which offers different models and types of investments for anyone between 18 and 70 years of age.

How much pension wealth will I get under NPS?

Your pension payout depends on several factors, such as monthly contributions, annuity purchases, total years of contribution, etc. Additionally, to determine the payout before you finalise your NPS investment, you can do the pension calculation yourself by using the Pension Calculator tool.

Is the NPS pension policy a better investment option than PPF?

While both the investment options are government backed, PPF has a fixed rate of interest, whereas NPS is market-linked with a low risk. However, the returns in NPS are higher than PPF. So, select based on your investment needs.

Is NPS risk-free?

No, an NPS is not entirely risk-free as it is linked to the market. However, it is governed by the pension regulator, PFRDA, making it a safe investment option.

Additionally, you can opt for Atal Pension Yojana if you wish to earn a guaranteed amount of pension in retirement.

What is the interest rate of NPS?

Interest rates depend on factors such as choice of the NPS class, pension contributions, choice of Pension Fund Managers, and type of NPS account. Additionally, the returns are market-linked, so the interest rates vary and may range from 9% to 12% p.a.

Which type of National Pension System is best?

A Tier I account is best suited for retirement planning, and a Tier II account enhances your investments and acts as a retirement savings tool. So, depending on your investment goals and needs, you can choose the best type for you.

Particulars	Tier I	Tier II
Minimum Contribution required at the time of Account opening	Rs. 500	Rs. 1000
Minimum Subsequent Contribution Amount required	Rs. 500	Rs. 250
Minimum Contribution required per year	Rs. 1000	NIL
Minimum number of contribution required in a year	1	NIL

NPS offers Subscribers two approaches to invest their money:

Active Choice:

Under this option, Subscribers are free to allocate the investment across three asset classes as per their choice
Maximum allocation to asset class E is restricted to 75%.

Asset Class	Description of Fund
E	Investments in predominantly equity market instruments
C	Investment in fixed income instruments other than government securities
G	Investments in Government Securities
A	Alternate Investment Funds

Auto Choice

Under this option, investment across three funds (E, C and G) is made as per the pre-defined pattern known as life - cycle fund.
8 fund managers are registered with PFRDA to manage the investment portfolio of NPS Subscribers.
Kotak Mahindra Pension Fund Limited
ICICI Prudential Pension Funds Management Company Limited
LIC Pension Fund Limited
SBI Pension Funds Private Limited
UTI Retirement Solutions Limited
Reliance Capital Pension Fund Limited
HDFC Pension Management Company Limited
Birla Sunlife Asset Management Company Limited