How to Transfer Money to NPS Account?

Pension accounts maintained by the NPS (National Pension System) permit regular contributions from its subscribers. National Pension System helps its subscribers to create and maintain a retirement corpus and provide tax benefits during the tenure of contributions. You can contribute to NPS Tier 1 and Tier 2 accounts either via physical mode or online mode.

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This article explores multiple aspects of transferring money to an NPS account.

NPS in Brief

Pension Fund Regulatory and Development Authority or PFRDA, the regulatory agency of the NPS, has appointed NSDL as the Central Recordkeeping Agency (CRA) for the NPS. 

CRA carries out all functions like Record Keeping, Administration, and Customer Service for NPS subscribers. Every subscriber is assigned a Permanent Retirement Account Number or PRAN. 

National Pension System (NPS) is a major milestone to develop an effective and sustainable voluntary pension system in India. The key objectives of the NPS are:

  • Provide income for the aged population

  • Offer reasonable market-based long-term returns

  • Provide security coverage to all senior citizens

What are the Modes of Contribution to NPS Account?

The NSDL infrastructure has made contributions to the NPS account a very simple process. Subscribers can make contributions to the NPS accounts in any of the following ways according to their convenience:

  • eNPS

  • Mobile App

  • Nodal Office

  1. Steps for Making Online Contribution via eNPS

    • Visit the eNPS website.

    • Click on the “Contribution” tab. If you are contributing via NPS log in, choose “Contribute Online” under the “Transact Online” tab to be re-directed to the eNPS portal.

    • Next, you need to enter the Permanent Retirement Account Number (PRAN) and Date of Birth.

    • Choose which option (SMS or Email) you want to receive the OTP to verify the PRAN.

    • Enter the captcha given and then click on “Verify PRAN.” You will then receive an OTP to the registered mobile number or email Id given.

    • Once you enter the OTP, the PRAN will be verified. Then you must select the account you wish the contribution is to be made (Tier 1 or Tier 2) and mention the contribution amount.

    • Once you enter the contribution information, the system will add the applicable charges and find out the total amount payable.

    • Choose the appropriate payment gateway, read and accept terms/conditions and choose “Make Payment.”

    • You will then be re-directed to the payment gateway website, from where you can complete the contribution payment via debit card, credit card, or net banking.

    People also read: pension plan

  2. Payments via UPI

    Unified Payments Interface or UPI is an immediate, real-time payment system through which you can instantly transfer money on a mobile platform. You can create a UPI ID to send or transfer funds through your bank account that is UPI enabled.

    1. Steps to activate UPI:

      • Download the UPI app from the App Store or Bank website.

      • Register the UPI ID you wish.

      • Set the MPIN to authenticate your transaction.

      • Link the UPI ID to your bank account number.

    2. NPS Contribution using UPI:

      • Select UPI as the payment choice in the payment gateway.

      • Give the UPI ID.

      • You will receive the payment notification on the UPI app.

      • Login to UPI app and complete the transaction within the allotted time.

      • You must enter the MPIN and validate the transaction.

  3. Steps to contribute online via NPS Mobile App

    • Download the NPS Mobile App from Play Store.

    • You can perform the Contribution transaction without logging into the app.

    • Enter the Permanent Account Number (PRAN), Date of Birth, captcha, and click on “Verify PRAN.”

    • You will receive an OTP to the registered mobile number or email ID.

    • Once you enter the OTP, the PRAN is verified. Then choose the account type (Tier 1 or Tier 2) and mention the contribution amount.

    • Once you enter the contribution information, the system will add the applicable charges and find the payable amount.

    • Choose the appropriate payment gateway and click on “Make Payment.”

    • You will then be re-directed to the payment website from where you can complete the contribution payment via debit card or credit card, or net banking.

  4. Steps to contribute via NPS POP-SPs

    Given below are the steps to contribute to NPS through POP-SP:

    • Download the NPS Contribution Instruction Slip (NCIS) from the website.

    • Locate your nearest POP-SP centre.

    • Fill in the necessary details in the form and submit the form to the nearest POP-SP along with the cheque or Demand Draft.

    • Once the form is submitted, you will receive an acknowledgement receipt from the POP-SP that can be used for tracking the contribution.

Important Points to Consider for NPS Contributions

Some things to know about NPS contribution are:

  • Contributions through eNPS are credited to your NPS account T+2 basis subject to receipt of fund clearance from the Payment Gateway Service Provider. 

  • Once the units are credited to your NPS account, an alert will be sent to you via SMS and email.

  • You can make a maximum contribution of Rs. 2000 to the NPS account using a debit card.

  • You can make a minimum contribution of Rs. 500 to Tier 1 account and Rs. 250 to Tier 2 account.

  • For contributions made via eNPS, POP service charges will be applicable @ 0.1% of the contribution amount (subject to a minimum of Rs.10 and a maximum of Rs. 10,000) per transaction. This charge will not apply to the registered subscribers of eNPS.

  • Given below are the charges levied for the different modes of payment:

  • 0.9% of Transaction amount + Service Tax for Credit card

  • 0.8% of Transaction amount + Service Tax for Debit card

  • 60 paisa per transaction + Service Tax for Net Banking

In Conclusion

NPS is beneficial for individuals but remains voluntary. You can contribute to the account any time of the financial year and also alter the amount you wish to set aside or save for transfer. NPS is flexible, portable, and regulated by the PFRDA. The investment is transparent, follows all investment norms, and fund managers regularly monitor and conduct performance reviews.

FAQ's

  • Q. What is the initial minimum contribution requirement for the NPS?

    A. A subscriber must make a minimum initial contribution of Rs. 500 under Tier-1 and Rs. 1000 under Tier-2 at the time of registration to the NPS.
  • Q. When will the units be credited to the NPS account?

    A. The units will be credited to the NPS account on the same day when the Pension Fund Manager invests the contribution. 
  • Q. Can a subscriber contribute to his or her NPS account before receipt of their PRAN card?

    A. Yes. A subscriber can contribute to his or her NPS account as soon as a PRAN number is allotted to the subscriber, irrespective of whether they have received their PRAN card or not.

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*Tax benefit is subject to changes in tax laws. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

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