Everything You Need to Know About How To Invest In NPS Online

Retirement planning is an integral part of everyone’s life. It involves planning alternate sources of income after you stop working. One way of doing this is investing money in different financial tools that yield profits. Another way is to deposit money in a retirement plan creating a regular source of income like the NPS. NPS stands for National Pension System and is offered by the Government of India. You can invest in NPS online through the National Pension System Trust website or Point of Presence (POP) service providers. But, before investing, learn all the details about NPS and how you can benefit from it.

What is NPS

NPS is a voluntary retirement savings plan started by the Government of India for Indian citizens. The introduction of this pension scheme was to develop a habit of saving among people. They should do this while they are still working. It will help them to have a retirement income when they are old. The Pension Fund Regulatory and Development Authority (PFRDA) manages this fund. When you invest in NPS online, the money you invest is placed in a shared pool. Then they divide this among different fund managers for further investment. It is the responsibility of the PFRDA to track the performance of the NPS funds.

Eligibility for NPS

These are the eligibility requirements to invest in NPS online:

• You must be a resident or non-resident Indian citizen
• You must be between 18 to 70 years on the date you apply.
• You must provide all KYC documents.

NPS Account Types

When you invest in NPS online, you should be aware of the two types of accounts you can open. They are:

• Tier I NPS Account: You cannot withdraw the amount in this permanent retirement account until you are 60 years.
• Tier II NPS Account: You can open this account only if you have a Tier I account. It is possible to withdraw the amount from this as per your need.

NPS Account Tax Benefits

A Tier I NPS account has many tax benefits under sections 80C and 80CCD (1B) of the Income Tax Act. As per section 80C, you can claim up to Rs. 1.5 lakhs on the amount you invest in the national pension scheme online as tax exemptions. Additionally, you can claim an extra tax exemption of Rs. 50,000 on your investment in a Tier I account under section 80CCD (1B). But, any investments made towards a Tier II account do not provide any tax benefits.

How to Invest in NPS Online

To open and invest in the national pension scheme online, follow the steps below:

1. Register and invest with Aadhaar on UIDAI:

• You must have an Aadhaar-linked mobile number.
• Using your Aadhaar details, log in to the UIDAI website and download the e-KYC zip file.
• Fill out the e-KYC zip file details and upload them to the UIDAI website.
• Enter a four-character share code created on the site.
• Fill up your other required details online.
• After a successful authentication process, all your demographic details will get picked up from the file.
• Next, upload a scanned copy of your signature, PAN card and cancelled cheque.
• You will have to pay online through internet banking to your NPS account.
• The amount you invest in NPS online will get credited to your account in two days.

2. Register and invest with PAN on e-NPS:

• You must have a PAN card.
• For e-NPS registration, upload Bank, Demat or Folio account details with a POP.
• The POP you select during registration will verify your KYC details.
• Fill up your other required details online.
• After a successful authentication process, all your demographic details will get picked up from the file.
• Next, upload a scanned copy of your signature, PAN card and cancelled cheque.
• You will have to pay online through internet banking to your NPS account.
• The amount you invest in NPS online will get credited to your account in two days.

Advantages When You Invest in NPS Online

When you invest in NPS online, there are many benefits including:

1. Easy to Access:

Since you can invest in NPS online, it is easy to access. All you need is the username and password once the account opens. You can manage the account easily online from anywhere. The NPS account opening is possible directly with the NPS trust or a POP and online access is provided so that you can access it effortlessly.

2. Simple to Apply:

When you want to invest in NPS online, you can open an account through a simple process. All you need to do is upload all required papers on the website. Once you apply through this straightforward online process, you can start your retirement savings.

3. Proper Regulation of Funds:

The PFRDA regulates the NPS funds. They track the performance of all the funds regularly with fund managers. Thus, it ensures that your investment amount is safe for retirement.

4. Flexibility and Transparency:

The process followed by the NPS trust is transparent, ensuring the correct use of the investments. You can choose from multiple ways to invest in national pension schemes online. If required, you can even change the fund managers of the investment portfolio. Thus, you get more flexibility and transparency in looking after your money.

5. Compounding Effect of Investments:

This is important for good retirement planning. Your investment grows with the power of compounding money. Thus, if you choose to invest in NPS online, it will give you better returns when you retire.

Conclusion

You must plan your retirement well. If you choose to invest in NPS online, you and your money will benefit from compounded growth. When you invest in NPS online, there are many benefits. In addition, NPS will provide you with a regular monthly income once you reach 60. Take advantage of both types of NPS accounts to get funds when needed. For more informative articles, visit Piramal Finance for better guidance on how to invest in national pension schemes online.