NPS full form is National Pension System that helps you to save income tax under Section 80CCD(1B) (Limit Rs. 50,000), which is over and above the limit of Section 80C (Rs. 1.5 Lakh). But how to open NPS Account? Can you open NPS account online and invest? What are the benefits of this NPS Account? What are the steps to open NPS account online? Let’s address all this queries in this post.
You can open NPS Account online using the eNPS Official Website – Register and provide details including mobile number, email ID, Aadhaar, PAN, Bank account details, etc. OTP will be sent on Aadhaar registered mobile number and PRAN (Permanent Retirement Account Number) will be generated upon successful registration. PRAN number will be used in future by you to invest and withdraw from NPS Account.
Let us understand all steps to open NPS Account Online.
Steps to open NPS account online
Eligibility to open NPS account is – you must be between 18 years to 60 years of age, Aadhaar or PAN card is required for NPS registration and PRAN generation and you can also be a NRI (Non Resident of India) to open NPS account online.
Below are the detailed steps you can follow to open NPS account online:
- Go to the eNPS Official Website
- Click on “National Pension System”. Below page will open
- Click on “Registration” option and below form will open
- You get the option to Register and open NPS account using Aadhaar number or PAN number
- When you choose Aadhaar option, OTP will be sent to the registered mobile number linked with Aadhaar
- While opting for PAN option, your PAN number and Bank name will be asked for further registration process
- Fill the required details for NPS registration as mentioned in above form – Applicant type = “Individual Subscriber”, Status of Applicant = Based on your citizenship and residence, Account type = Tier 1 only (you can activate Tier 2 later after registration also) and click on Generate OTP (for Aadhaar option)
- After submitting the generated OTP, below form will be displayed:
- In above form you need to provide details to open NPS account – Personal Details, Contact Details, Bank & other details, Scheme & Nomination details, Documents upload, Photo & Signature Details and Payment Details
- After all above details are provided by you, Acknowledgement ID will be generated and PRAN will be allocated to you.
- Last step is to eSign the details provided by you with the help of OTP sent to your mobile number
- And you are ready to Invest in NPS and Save Income Tax!
What is NPS Scheme
For those who are new to NPS, let us understand more about NPS Scheme.
- NPS full form is National Pension System
- This scheme is regulated by PFRDA (Pension Fund Regulatory and Development Authority)
- By pension, we mean the amount we get after our retirement – when we no longer work specifically for money!
- The main Goal of opening and investing in NPS is to plan for our retirement, so that we get a stable income during our old age even when we are not working under our employer.
- NPS scheme was initiated by Central Government in 2004
- It was made available to all citizens of India in 2009
- Anyone between age 18 years to 60 years can open NPS Account and save for their retirement
- You can also be a NRI (Non Resident of India) and open NPS account
- You can invest in NPS up to the age f 60 years, after which you start getting pension
- Investments in NPS helps you to claim deductions under Section 80CCD(1B) to save income tax with Old Tax Regime
Watch below video to know more about NPS scheme in more details.
NPS Scheme Explained in a Video
Watch more Videos on YouTube Channel
So above video addresses many queries regarding NPS, How NPS works, Tier 1 and Tier 2 accounts in NPS, withdrawal rules and lot more.
Which bank is best for NPS Account opening?
We have seen above how to open NPS account using the eNPS Official website. But can you open NPS account in bank?
Yes you can open NPS account in popular banks such as SBI, HDFC, ICICI, etc.
SBI is one of the best banks to open NPS account online. You can also use SBI Yono App to open NPS account and start investing!
ALSO READ: How to Invest in SIP Online
What are the Benefits of NPS?
Below are the benefits of opening and investing in NPS account:
- Save Income Tax: NPS helps you to save income tax under Section 80CCD(1B) with limit of Rs. 50,000 in Old Tax Regime. This is important benefit if you are salaried and looking for ways to save tax using ways other than Section 80C
- Flexible: NPS offers range of fund managers and your own strategy to invest in the form of lumpsum or SIP while you save income tax at the same time.
- Simple: It is very simple to register and open NPS account online with the help of few steps mentioned above.
- Regulated: NPS scheme is regulated by PFRDA and is secure to be invested in. Remember that this is not a government backed scheme and the returns are dependent on market returns. Over long term, the Pension fund managers try to get the maximum returns for your invested amount.
Which NPS has highest return?
HDFC Pension Fund as given best returns over the past from the date of launch. It depends on fund managers experience and how to invest your money in the markets to get the best returns for you.
Below is the screenshot of the returns provided by all pension funds over the years:
How to Invest in NPS Online
Now since we have seen how to open NPS account online, it’s benefits and what are the best NPS funds, let us now understand how to invest in NPS Online.
You can do so easily with the live demo of steps to open NPS account online, I have mentioned in below video:
Steps to Invest in NPS Online Video
Watch more Videos on YouTube Channel
Watch above video in full and know the entire process to invest in NPS online!
WHICH NPS IS BEST?
So which NPS fund is best? Obviously the one that has given highest returns will be favored here.
HDFC PF has given highest return and this is the fund that is mostly selected by investors while investing in NPS.
But this is not mandatory. You can invest and assess other pension funds as well listed above and see how they give returns in future. Anyway, past returns does not guarantee future returns so select your pension fund accordingly and measure the performance of pension funds before taking the decision to switch to other pension fund.
Yes, you can switch to other pension fund as well, if you are not happy with the returns of existing pension fund you selected. All the existing units you bought will be transferred to the new pension fund after the switch.
ALSO READ: Best Mutual Funds to Invest in 2023
Which is better NPS or FD?
NPS and FD are 2 different investment schemes. It depends on your financial goals before you can choose to invest in these schemes.
If you goal is short term for 6 months to 2 years, you can invest in FD or Fixed Deposits and get the maturity amount once your goal is achieved.
On other hand, NPS is a long term investment scheme. It is specifically to achieve your retirement goals.
So FD is best for short term goals and NPS is better for long term goals.
ALSO READ: Rs. 10,000 FD Interest Calculation
Conclusion
So it is very easy to open NPS account online using the official eNPS website and the steps mentioned above. While you invest in NPS, you get tax benefits, flexibility to choose pension fund managers, tier 1 account for retirement and tier 2 account for savings and withdrawals.
Also NRI (Non Resident of India) can open NPS account online.
Some more Reading:
- Rs. 1000 PPF Interest Calculation for 15 Years
- All Deductions allowed for Tax Payers
- How to Calculate Income Tax on Salary
Frequently asked Questions
Can I open NPS account in any bank?
Yes you can open NPS account in banks such as SBI, HDFC, ICICI, etc.
Can I open NPS account in SBI bank?
Yes you can open NPS account in SBI Online or using SBI Yono app via mobile
Can NRI invest in NPS?
Yes NRI can also invest in NPS and take benefits of returns from markets in India.
Get EARLY Retirement!
Use Retirement Excel Calculator that will help you to Retire Early.
Click below button to download Retirement Calculator in Excel:
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Income Tax Calculator App – FinCalC
For Income Tax Calculation on your mobile device, you can Download my Android App “FinCalC” which I have developed for you to make your income tax calculation easy.
What you can do with this mobile App?
- Calculate Income Tax for new FY 2024-25 and previous FY 2023-24
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- Know how much to invest more to save income tax
- More calculators including PPF, SIP returns, Savings account interest and lot more
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