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Contribution through Credit card discontinued for tier-2 NPS account holders

After this decision, the payment option via credit card for tier-1 account holders of NPS will continue, whereas for tier-2 account holders, the facility is no more available.

August 04, 2022 / 03:35 PM IST
Representative image

Representative image

The tier-2 account holders in the national Pension System (NPS) will no longer be able to make contributions through credit cards, said the Pension Fund Regulatory and Development Authority (PFRDA) in  an official notification dated August 3, 2022.

After this decision, the payment option via credit card for tier-1 account holders of NPS will continue, whereas for tier-2 account holders, the facility is no more available.

Also Read: MC Explains: How much can you withdraw from NPS?

"The Authority has decided to stop the facility of payment of subscriptions/contributions using credit card as a mode of payment in the Tier-II account of NPS. Accordingly, all PoPs are advised to stop the acceptance of credit card as a mode of payment for the Tier-II account of NPS with immediate effect,'' the PFRDA circular said on the discontinuation of credit card payment in tier-2 NPA accounts.

However, payment from credit card for tier-1 account of the NPS will continue. Credit card payment for investment in mutual funds or stocks are not encouraged as such payments involve over leveraging of high interest money.

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For example, NPS account holders opting for credit card payment need to pay payment gateway charge of 0.60 per cent. The over-leveraging goes further higher when we add GST in it, according to a repot by business daily Mint.
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