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Want To Set Up An SIP For NPS Tier I & Tier II Accounts? Know The Process Here

Here’s how to set up a systematic investment plan (SIP) for an NPS account (Tier I and Tier II) online (D-Remit) or offline (NPS POP) and the cost applicable for both the process.

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Neelanjit Das
March 9, 2023
Want To Set Up An SIP For NPS Tier I & Tier II Accounts? Know The Process Here

The National Pension System (NPS) is a voluntary pension scheme that allows an Indian citizen to open an account, contribute and get a pension after retirement.

You can either start a systematic investment plan (SIP) for NPS through online (D-Remit) or offline, points of presence (POPs), as per your convenience.

But before you register for an NPS SIP, you need to have the following functionalities:

●    An active NPS account with a valid permanent retirement account number (PRAN) and updated mobile/email ID details.

●    Active net banking facility in your registered bank account, with RTGS/IMPS/ NEFT facility.

●    Your bank must support the e-mandate process or standing instruction (SI) functionality.

The Process For Online SIP In NPS

The old online process used a payment gateway provider; hence, NPS subscribers used to get T+2 net asset values (NAV) values. The new D-Remit online process, introduced in 2020, gives same-day NAV (if the trustee bank gets the amount before 9.30 am) to NPS members.

Here’s what you need to do for online SIP registration in NPS:

●    Go to the eNPS website
●    Click on the NPS button in the lower right side of the webpage.

●    After that, click on the ‘get same day NAV (register for D-Remit)’ tab.

●    Enter your permanent retirement account number (PRAN) number, date of birth (DoB), verify using OTP and fill the captcha.

●    After the verification process, you will have to start the ‘virtual account ID registration process.

●    Depending on your choice of NPS tier account, a virtual account ID will be generated for either Tier I or Tier II or both.

Priti Rathi Gupta, founder and managing director (MD) of LXME, a financial platform for women, pointed out that NPS subscribers should note if they have both Tier I and Tier II accounts and wish to register for a virtual ID in both the tiers, for which they must create two “separate virtual IDs”.

Mahesh Shukla, CEO and founder, PayMe, a financial services company, said, investors can start a SIP in NPS through the D-Remit feature. To avail of this benefit, one should have to create a virtual account with the trustee bank which can be used for remitting NPS contributions. But, before taking any decision one should make sure that her/his mobile number and Permanent Retirement Account Number (PRAN) are updated in NPS.

Here’s How To Register For SIP After Virtual ID Is Generated

●    After the virtual ID is generated for the respective tiered NPS account, you will need to login into your bank’s net banking website. Some banks also have this facility in their Android/ iOS apps.

●    You will get the relevant virtual ID and other details in your registered email/ SMS. Then, you will have to add the NPS trustee bank as a beneficiary in your bank account.

●    The beneficiary name will be your name as per PRAN records. The account number is the virtual ID number. The account type is current, and the IFSC code is UTIB0CCH274 since Axis Bank is currently handling the process for D-Remit.

●    You can also automatically invest via SIP if your bank supports e-mandate or standing instruction (SI) payment features. Otherwise, you can manually invest via D-Remit using IMPS/RTGS/ NEFT, once you add the virtual ID account as a beneficiary.

NPS Trustee Bank DetailsSource: NPS Website

 Is Any Charge Applicable For SIP Process In NPS?

Online SIP Registration

Dhaval Kapadia, director, managed portfolios, Morningstar India, the Indian subsidiary of US-based financial services company, Morningstar Inc, said the minimum contribution through D-Remit is Rs 500 for both Tier I and Tier II and one-time SIP fee of Rs 3.5 plus taxes.

However, the fee will not be charged at the time of payment; instead, it will be taken from your NPS account at the end of the quarter as an equivalent unit deduction, meaning Rs 3.5 plus taxes worth of NPS units will be deducted from your account.

NPS POP SIP Registration

One may choose to take the help of various NPS points of presence (POPs) officials/agents across the country. The list of NPS POPs pan India can be checked here. (Hyperlink here: https://npscra.nsdl.co.in/pop-sp.php)

However, do note that there is a nominal charge associated with this process. The charges are 0.5 per cent of the contribution amount, with a minimum of Rs 30 and a maximum of Rs 25,000. These charges would be recovered by equivalent unit deduction.

What Should You Do?

Gupta advised people to start investing in NPS through SIP that will help you become disciplined in finance to achieve your goals and benefit from “the averaging costs of NAV in the long run.”

However, there is a cost attached in whichever SIP process you opt for. If you are tech-savvy and familiar with your bank’s net banking system, go for the D-Remit process otherwise, you can seek the help of NPS POP officials/agents.

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