“The National Pension Scheme helps you enjoy a stress-free retirement.” We have all heard this statement, but not everyone is aware of NPS benefits. Investing in the National Pension Scheme offers a wide range of advantages, from guaranteed income to tax benefits and compound interest. So, let us explore the National Pension System (NPS) in detail, covering its definition and the process of how to apply for National Pension Scheme.
What is the National Pension System?
The National Pension System is a pension programme that is backed by the Central Government. Under this scheme, investors regularly invest a portion of their income in different asset classes, such as equity, corporate debt, government securities and alternative investment funds, etc.
It offers two options: Active and Auto choice. In Active choice, you can customise your asset allocation across four classes, with limits of 75% in equities, 5% in alternative assets, and 100% in corporate debt and government securities. Auto choice automatically adjusts your allocation based on age, with three pre-set options: aggressive, moderate, and conservative, following a life cycle investing approach. At maturity, you can withdraw up to 60% of the corpus, while the remaining amount is used to purchase an annuity that provides lifelong pension.
NPS registration offers a diverse range of long-term savings options, enabling you to secure your retirement by choosing a scheme that aligns with your financial goals and risk appetite.
How to apply for NPS online?
The answer to “how to apply NPS” is very simple. Thanks to the official eNPS portal and online facilities offered by different banks, including Axis Bank, you can apply for NPS from the comfort of your home or office by following a seamless, paperless NPS procedure.
All Indian citizens between 18 and 70 years can open an NPS account online. Follow the steps listed to know how to apply for NPS.
Steps to open an NPS Account online
- Visit the Axis Bank’s website.
- Hover your cursor over the “Explore Products” option in the main menu.
- Click on “Investments” and select “National Pension System (NPS)”.
- Select your preferred Central Recordkeeping Agency out of the given options and click on “Apply NPS”.
- You will be redirected to the subscriber registration page.
- Enter your name, applicant type, account type, PAN or Aadhaar Number.
- Click on “Continue”.
- Provide your personal details, bank details, scheme details and contribution amount.
- Upload relevant documents and pay the applicable fees.
- Once you submit these details, your PRAN will be generated and sent to your registered mobile number.
- Use the PRAN to log in to your account.
FAQs
Can anyone open more than one NPS account?
According to the Pension Fund Regulatory and Development Authority (PFRDA), an individual is not allowed to open multiple NPS accounts.
Where can I open an NPS account?
You can open an NPS account through an authorised entity known as Point of Presence (POP), which includes various banks, including Axis Bank, and financial institutions or through the official eNPS NSDL portal.
Which documents are required for NPS account opening?
To open a Tier 1 or Tier 2 NPS account, you need to mandatorily submit documents, including a duly filled NPS application form. It is essential to comply with the KYC norms as outlined by the Subscriber Registration Form (SRF). KYC documents typically include your Aadhaar card, proof of identity, proof of address and D.O.B certificate.
Can anyone change the data in their account?
Yes. You can request changes or updates in your NPS scheme subscription account by submitting relevant forms to your Point of Presence Service Provider (POP-SP).
Is NPS return tax-free?
Upon lump sum withdrawal, 60% of the withdrawn amount will be eligible for tax exemption.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
