How to open an NPS account

When it comes to the financial security of older, retired people in India, a recent report revealed that seven out of ten Indians expect their children to support them after they retire. The numbers are not entirely welcoming. To address problems of financial dependency, the government of India has come with a scheme called the National Pension Scheme — the NPS scheme.

The central government implemented the National Pension Scheme on May 1, 2009. People who subscribe to the scheme are allotted a unique Permanent Retirement Account Number (PRAN).

Here, we will look more at the details of the NPS scheme, NPS account benefits, and how to open an NPS account.

 

Overview of the Nation Pension Scheme

 

The NPS is a security pension and an investment scheme which is open to employees of all private, public, and unorganized sector and is seen to provide security for old age.

The scheme aims to create long term savings for before by encouraging them to save and invest more regularly during the time that they are employed. Once the time of retirement comes, people receive a certain lump sum of the investment, while the rest of it is diverted to an annuity scheme, which then promised fixed monthly payouts to help people go by in their old age.

It is of great benefit for those who cannot bank on their official pensions — worst if they are in the private sector _ to suffice for the needs of their old age. With regular and timely money at hand, it becomes much easier to go through life after retirement as you do not have to seek help from others for your financial needs. With this, you become financially independent, and this is a great thing to be — so you must have realized during the course of your life.

There are several investment choices under NPS. Here, you get the option to design your investment portfolio among three asset classes:

  • You have the option to invest 50 percent in equity — inviting for significant risk but promising high returns at the same time.

  • You can invest money in corporate bonds that are a fixed income bearing instrument, offering moderate returns.

  • Investing in government securities that provide assured returns.

 

Who is eligible for an NPS account?

 

The eligibility criteria for opening an NPS account on Finserv MARKETS is quite simple and straightforward. To begin with, you need to be an Indian citizen. Both Indian residents and non-residents are eligible for this. You need to be between 18 to 65 years of age — according to the date which you mention on the application and which could be verified through your documents. With that, you also need to provide your documents to complete the KYC process.

However, it must be noted that you cannot open more than one account under your name.

 

Tax benefits

 

One of the best features you get when you open an NPS account on Finserv MARKETS is that you are liable for tax benefits up to Rs 1.5 lakh. This comes as a great benefit to those who are looking forward to saving more on their investment, as tax reliefs are always welcome.

A deduction is allowed under Section 80CCD(1) for self-contribution. This deduction goes up to a maximum of 10 percent of your salary; however, it cannot cross the stated limit of Rs 1.4 lakh. However, if you fall under the self-employed category, then this limit goes up to 20 percent of your gross income.

This happens because if you are a salaried person, then the contribution of the employer is also used as a deductible.

Besides all of these features, you get access to an additional tax deduction on investments up to Rs 50,000 in the NPS scheme. This benefit comes to NPS subscribers under the subsection 80CCD (1B) of the Income Tax Act. Considering this deduction happens to be over and above Rs 1.5 lakh, you get to claim a total tax benefit of Rs 2 lakh.

 

How to open an NPS account

 

The steps to open an NPS account on Finserv MARKETS are quite simple. All you have to do is provide the investment amount by stating how much would you like to invest in this scheme. Post that you have to complete your payment of the first installment. That done, you can move on to completing the KYC process by providing a few basic documents for identity verification.

When all is done, you will be successfully activating your NPS account and will get access to your unique PRAN number. Using the PRAN number, you can access your account anytime and anywhere. It is recommended that you keep this number at you access so that you do not have any trouble accessing your account. However, in case you misplaced it, you can quickly recover it online.

It is essential that you provide all the documents correctly to ensure the smooth opening of your account. If you do not do that, then you might meet with some hassle during the account opening process.

Another great feature of opening a National Pension Savings account on Finserv MARKETS is that you can get access to your account online, which means that the accessibility will be at your fingertips. Among all of the above-mentioned NPS account benefits, You can access, configure, and modify the account anytime and anywhere.

 

Conclusion

 

With all the NPS account benefits, it is advisable to consider opening a National Pensions Scheme account. When you do this on Finserv MARKETS, you also get access to the online tracking facilities so that you know how your money is fairing. Besides, you can be assured of your investments making money because they are regulated by the Pension Fund Regulatory and Development Authority (PFRDA).

You get to enjoy a host of options when it comes to investment and fund managers, as it allows you the flexibility of choosing both. You also have the option to switch between fund managers and investment options for maximized results.

 

Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere! 

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