National Pension System

National Pension System (NPS) is a perfect solution for retirement planning. It provides old age income with reasonable market based returns. It is based on unique Permanent Retirement Account Number (PRAN) which is allotted to every subscriber for NPS.

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Benefits to Subscriber in NPS account

An NPS Account with HDFC Bank offers the following benefits:

  • Exclusive Tax Benefit: NPS offers additional deduction of Rs.50,000/- u/s 80CCD (1B)
  • Regulated: NPS is regulated by PFRDA (Pension fund regulator under Govt. of India)
  • Transparency: NPS account can be accessed online to make contributions and track investments.

Who can open an NPS Account?

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Types of NPS accounts

The NPS is largely focused on one's retirement. While up to 60% of the maturity corpus can be withdrawn as a lump sum on maturity, the balance is compulsorily annuitized, i.e., balance is used to fund the annuity (pension) after retirement. This annuity is fully taxable in the year of receipt as income from other sources.

Subscribers have the option to open two types of NPS Accounts under the same Permanent Retirement Account Number (PRAN):

  • Tier I: Contributions done to this account are eligible for additional tax deduction benefit of up to Rs. 50,000/- under section 80CCD (1B), over and above Rs.1,50,000/- u/s 80C. Withdrawals are restricted and subject to terms and conditions.
  • Tier II: Subscribers can invest an additional amount in Tier II NPS Account. Subscriber is free to withdraw his entire accrued corpus under Tier II at any point of time. In case subscriber has not contributed even the initial contribution towards Tier II a/c, it will be automatically deactivated as per process. No tax benefits are available in this account.
  • To apply for NPS, click here Apply Now

How to open an NPS account?

Subscriber can enrol for NPS through the online application mode from the convenience of his home / office. The prime objective of the scheme is to provide all citizens of India with an attractive long term savings avenue to plan for retirement through safe and reasonable market based returns. The account can be opened by all Indian Citizens between 18 to 60 Years.

Steps for online account opening:

  • Subscriber can enrol for NPS by clicking on 'Apply Now' option under NPS (National Pension System)
  • Subscriber will get online form, which needs to be filled with mandatory fields.
  • Receipt number for subscriber registration (account opening) will be generated. There will be provision to complete the registration (account opening) later based on receipt number search.
  • Subscriber's e-KYC will be done through Aadhaar (OTP based authentication).
  • Subscriber enters remaining details like Bank details, scheme details, nominee details etc.
  • Subscriber needs to upload photograph and signature (Cheque and PAN for Tier II).
  • Subscriber will enter the contribution amount (this is the amount subscriber wants to invest in NPS) and click for payment.
  • Subscriber will be directed to online payment platform wherein subscriber will complete the payment through HDFC Bank NetBanking.
  • On successful payment, PRAN will be allotted to the subscriber and PDF form will be generated based on data given. This can be saved for reference and need not be sent separately (This is only applicable for Aadhaar based NPS account opening).
  • To apply for NPS, click here Apply Now

 

NPS Account opening Contribution:
ParticularsTier ITier II
Minimum Contribution required at the time of account opening Rs.500/- Rs.1000/-
Minimum Subsequent Contribution amount required Rs.500/- Rs. 250/-
Minimum contribution required per year Rs.1000/- NIL
Minimum number of contributions required in a year 1 NIL

User Friendly Features of (NPS)

The NPS is largely focused on one's retirement. While up to 60% of the maturity corpus can be withdrawn as a lump sum on maturity, the balance is compulsorily annuitized, i.e., balance is used to fund the annuity (pension) after retirement. This annuity is fully taxable in the year of receipt as income from other sources.

Below given are the Features of NPS :

NPS on mobile Application : A mobile app for NPS Subscribers called 'NPS by NSDL e-Gov' is available. The Subscriber can now view their NPS account, scheme holdings, latest Net Asset Value (NAV) and the total value of the schemes through this app. Subscribers can view the transaction statement for a particular financial year, as well as details of last five contributions. Subscriber can switch among fund managers, asset classes and change the allocation ratio.

Facilities available in Subscriber’s login :

  • View profile details
  • Transaction Statement
  • Statement of Holding
  • Contribution Statement
  • Transaction through OTP authentication
    • Contribution
    • Tier II withdrawal
    • Scheme Preference change
    • One Way Switch (from Tier II to Tier I)
    • Reprint of PRAN Card
  • Change of contact details
  • Change of address using Aadhaar authentication
  • Grievance facility
  • Various Views
    • E-PRAN view and download
    • NAV details
    • Tier II details
    • POP (Point Of Presence) details
  • Facilities outside login:
    • Contribution
    • Tier II activation
    • IPIN reset
  • To apply for NPS, click here Apply Now

 

Portability: With online accessibility, Subscriber can access their account across geographies. Each subscriber who joins the NPS is allotted a unique Permanent Retirement Account Number (PRAN) number. PRAN will remain the same throughout the life.

Address change using Aadhaar authentication: An NPS subscriber can now update or modify his address on his own using Aadhaar-based authentication. Once the subscriber logs in, he just has to click on "Update Address" by providing the Aadhaar number and then click on the 'Submit' button after which an OTP (one-time password) will be sent to his mobile. Once he authenticates by submitting the OTP, the address details from the Aadhaar system will be fetched and updated in the system. The Subscriber will then be able to update both, permanent, as well as correspondence address.

Online IPIN generation: Subscribers can access the system immediately after registration. They will be able to generate IPIN instantly and access their NPS account.

Online Contribution: Subscriber, with IPIN credentials, can login and click on the 'Contribution' button wherein contribution can be made.

Stakeholders in NPS

Pension Fund Regulatory and Development Authority (PFRDA) is a pension regulator which was established by the Government of India on August 23, 2003. PFRDA is authorized by Ministry of Finance, Department of Financial Services. PFRDA promotes old age income security by establishing, developing and regulating pension funds and protects the interests of subscribers in schemes of pension funds and related matters.

Central Recordkeeping Agency (CRA) as the sector regulator PFRDA has appointed Karvy Computershare & National Securities Depository Limited (NSDL) to offer NPS.

Point Of Presence (POP) - The first point of interaction between the subscriber and the NPS architecture. POP shall facilitate the subscriber registration and submission of contributions. HDFC Bank Ltd. is registered with PFRDA as a Point of Presence (POP).

Pension Fund Manager (PFM)

The contributions invested in NPS are managed by 8 Pension Fund Managers (PFM) appointed by PFRDA. The Subscriber can choose any one of the below given entities:

  • HDFC Pension Management Company Limited
  • Reliance Capital Pension Fund Limited
  • UTI Retirement Solutions Limited
  • Kotak Mahindra Pension Fund Limited
  • LIC Pension Fund Ltd
  • SBI Pension Funds Private Limited
  • ICICI Prudential Pension Funds Management Company Limited
  • Birla Sunlife Pension Management Limited *New

 

Annuity Service Providers

After completion of 60 years of age, the subscriber will have options to start Annuity. Below are Life Insurance Companies registered with PFRDA that offer Annuity:

  • HDFC Standard Life Insurance Company Limited
  • Star Union Dai-Chi Life Insurance Company Limited
  • Life Insurance Corporation of India Limited
  • ICICI Prudential Life Insurance Company Limited
  • SBI Life Insurance Company Limited
  • To apply for NPS, click here Apply Now

 

Fees and Charges

IntermediaryCharge HeadService Charges*
Charges by Bank - Point Of Presence - POP (Maximum  Permissible Charge for each Subscription) Initial Subscriber Registration  Rs. 200/-
Initial Contribution 0.25% of the the initial contribution amount from subscriber subject to a minimum of Rs.20/- and a maximum of Rs.25,000/-
Any subsequent Contribution
All Non Financial Transactions Rs.20/-
  e-NPS (for subsequent contributions) 0.10% of the contribution. Min. Rs. 10/- & Max. Rs. 10,000/- (Only for NPS- All Citizen & Tier- II accounts)
Charges by Bank - Point Of Presence - POP (Through cancellation of Units) Persistency Rs. 50/- per annum (Only for NPS- All Citizen Model)
     
M/s NSDL e-Governance Infrastructure Ltd (1st CRA)  Permanent Retirement Account Number (PRAN) Opening Charges Rs.40/-
PRAN Annual Maintainance Charges Rs. 95/-
Charge per transaction  Rs. 3.75/-
M/s Karvy Computershare Pvt Ltd (2nd CRA)  PRA Opening Charges  Rs. 39.36/-
Annual PRAN Maintainance cost per account Rs. 57.63/-
Charge per transaction  Rs. 3.36/-
Fund Management Charges (FMC) 0.01% p.a. of total accumulated amount

 

Note : *The charges are subject to revision by Regulators. *Taxes as applicable.

To apply for NPS, click here Apply Now

Investment Choices

Subscribers have the option to select allocation pattern for their investment across various asset classes.

Active Choice: This option allows the subscriber the freedom to design the portfolio among 3 asset classes as below:

  • Equity (E): This is a 'High risk – High Return' option as the funds are invested in equity Subscriber can choose to invest up to 50% in this class
  • Corporate Bonds (C): Funds are invested in fixed income bearing instruments which offer medium returns
  • Government Securities (G): Funds are invested only in Government Securities

 

Auto Choice- Life Cycle Fund : In case 'Active Choice' as described above is not selected, the contribution funds will be invested in a pre-defined proportion depending on the age of the subscriber. The exposure will be higher in equity at a younger age and will be moderated progressively to get a balance among high, medium and low risk investment. For example, allocation in equity till the age of 36 years is 50% in "E" , 30% in "C" and 20% in "G" asset class. After the age of 36, asset allocation starts decreasing from "E" and "C" and increases in "G" till it reaches 10% in "E" & "C" and 80% in "G" asset class.

To apply for NPS, click here Apply Now

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