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Are you thinking about securing your retirement years financially? One retirement scheme that has gained popularity in recent years is the National Pension System. It is a government-sponsored retirement savings scheme designed for long-term wealth creation. Any Indian citizen between the ages of 18 and 70 years can open an NPS account online or offline. The key objective of the NPS is to provide financial security to salaried individuals during their retirement years. Moreover, opening an NPS account is fairly easy. So, if you are looking for an answer to ‘how to open an NPS account, then this blog is for you.
National Pension System
A voluntary retirement savings scheme that allows individuals to contribute consistently during their working years. NPS invests in a mix of asset classes, such as equities, corporate bonds, government securities, and AIFs. The Pension Fund Regulatory and Development Authority (PFRDA) regulates NPS to maintain its transparency and make it a secure option to choose. Opening an NPS account can be a smart step towards a financially secure golden year.
How to open an NPS account?
1) Log in through a reliable eNPS website on your laptop or mobile device.
2) Sign up as a new user by providing your PAN, Aadhaar, and other required details.
3) After NPS registration, you’ll receive your Permanent Retirement Account Number (PRAN) to access your NPS account online.
4) NPS login with PRAN is a simple and secure way to access your account.
5) Activate your account by making your initial investment in NPS.
6) Choose your fund manager, decide your investment mix, and select between active or auto allocation modes.
Advantages of NPS
a) Regulated: The National Pension System is regulated by PFRDA, which ensures transparency and safeguards the subscribers’ interests.
b) Potential of High Returns: The returns of NPS are linked to the market as they invest in equities. This makes NPS a preferable choice among individuals.
c) Diversification: NPS offers the necessary diversification that an investment should have as it invests in a combination of asset classes.
d) Portability: A change in job or location of an NPS subscriber doesn’t affect their contributions or returns. They can continue investing in NPS without worrying about job or location changes.
e) Professional Management: Professional fund managers handle NPS investments. They possess years of experience and expertise to create a balance between risk and rewards.
f) Tax Benefits: This is one of the key advantages of NPS. It provides tax benefits of ₹1.5 lakh under Section 80 (C). Moreover, there is an additional tax benefit of ₹50,000 under Section 80CDD1(B), which is over and above under Section 80 (C).
g) Lesser Investment Amount: Any Indian citizen can open an NPS account online with a minimum contribution of ₹500.
Click here to learn about NPS tax benefits.
Final Thoughts
Planning for your golden years can be complex, but NPS registration is a hassle-free process. With advantages such as low investment amounts, diversification, tax benefits, and potential for high returns, opening an NPS has become an attractive option for many individuals. NPS subscribers can also choose their investment approach as per their investment horizon and risk appetite. This makes NPS an attractive option for every Indian citizen.
