The National Pension System (NPS) was launched in 2004 as a small savings scheme for retirement, initially made available only to government employees, before being extended to the rest of the people in 2009.

NPS offers a lump sum withdrawal at retirement and annuity benefits after 60. Both Indian and non-resident Indians can apply to the scheme. NPS invests in the stock market besides government securities to provide investors with a better risk-adjusted return at retirement.

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Here is how you can invest your money in NPS.

NPS offers two schemes: Tier 1 and Tier 2. One can open the latter only if they have a Tier 1 account. NPS invests in instruments like equity, government and bonds, and alternative investment avenues.

Lately, NPS has effected several changes to make it more flexible and accessible for the public. For example, investors can choose fund managers for different investment categories, make deposits up to 70, and withdraw funds in a lump sum or through the systematic withdrawal plan. Also, one can deposit money in both offline and online modes.

Let’s learn more about these options.

Offline: Anyone can contribute offline to NPS by approaching the nodal office or the point of presence (PoP). The applicant can either submit the document to the nodal office, where the details are verified and uploaded to the Central Record Keeping Agency (CRA), or go to the POPs, like banks and post offices, for this purpose. A subscriber can contribute by paying through cash, cheque, or a demand draft. If not well-conversant with digital modes, senior citizens may find it convenient because of in-person dealing.

Online: A subscriber maintaining an NPS account with any of the three CRAs (NSDL, K-Fin, CAMS) or with POPs can also deposit money online.

eNPS Portal: A Permanent Retirement Account Number (PRAN) is allotted when a subscriber opens an NPS account. You can log in and invest in NPS online using PRAN (as login ID) and a password.

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Here is the process:

Step 1: Visit the eNPS official website and click on ‘contribution’

Step 2: Enter PRAN and date of birth and select the option (SMS or email) to receive OTP for verification

Step 3: Enter the OTP and select the account for contribution (Tier 1 or Tier 2)

Step 4: Once the contribution amount is entered, the system will calculate charges on it and will show it on the screen

Step 5: Click ‘Make Payment’ and pay the amount through a debit card, credit card, or net banking using the card details or net banking password.

According to the NPSCRA NSDL website, the charges for making payments through a credit card are 0.90 per cent of the transaction amount and service tax. Through a debit card, it is 0.80 per cent of the transaction amount and service tax, and for net banking payment, it is Re 0.60 (60.0 paise) per transaction and service tax.

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Unified Payments Interface (UPI): Unified Payments Interface or UPI is a faster payment method. For this, remember the UPI linked with the bank account, select the UPI option for the payment and authorise the payment demand from the portal by entering the UPI PIN.

In December 2020, the Pension Fund Regulatory and Development Authority (PFRDA) introduced a D-Remit (direct remittance) based Quick Response (QR) code feature where subscribers can scan the QR code and make payments. With this facility, contribution to NPS has become faster, eliminating the need to remember the net banking ID and password or the card CVV number.

Mobile Application: A subscriber can also use the NPS CRA mobile app (NSDL e-Gov and KFintech NPS) to make payments. The process is the same as online payment through the eNPS portal. The subscriber needs PRAN and a password or the linked mobile number to receive an OTP for login. Then, follow the instructions and pay the amount to NPS.