National Pension System is a smart way to save money for retirement and get tax benefits at the same time. It is voluntary for individuals and the fund is managed by Pension Fund Regulatory Authority (PFRDA).
There are two types of accounts Tier I and Tier II. NPS Tier I account doesn't let you withdraw your money until you turn 60.
But the Tier II account aims to provide a window of liquidity to meet financial contingencies and build savings through investments.
NPS Tier II account subscribers can do unlimited online withdrawals and whenever needed they can get the sum credited in their bank account. Only a government employee can avail a tax deduction under Section 80C for contribution to Tier II account as of now.For Tier II NPS account there is a lock-in period of three years. It is mandatory to have a Tier I NPS account first to open a Tier II Account.
Steps to open an NPS Tier II Account online:- Visit eNPS website (https://enps.nsdl.com) and click on National Pension System.
- Next, you have to click on 'Tier II Activation'.- Next, you need to submit three mandatory details to get OTP. The three details are - Permanent Retirement Account Number (PRAN), Date of Birth and Permanent Account Number (PAN).- Click on 'Verify PRAN' to receive a one time password on your registered mobile number.- Write the OTP received on your mobile in the given space and continue.- Fill up your bank details and click on 'Validate Aadhaar'.- You will get your acknowledgement number. Click on OK.- Next, you will need to choose a pension fund manager (PFM) and investment option -Auto or Active choice.- Then click on 'Save and Proceed'.- Enter your nominee details and click on 'Save and Proceed'.- Next you need to upload two documents- your scanned PAN card and a cancelled cheque.- Once the documents are attached, click on 'Upload'.- After the documents are successfully uploaded, make payment towards the Tier II NPS Account. You can open a Tier 2 account with a minimum investment of Rs 1,000.- Next, you will get your receipt for your contribution to the NPS Tier II Account.- Now you need to esign the application using your Aadhaar number. Once you provide your Aadhaar number, you will receive an OTP on your registered mobile number. Submit the OTP.- Once you have signed your application successfully, you can download your application, put your signature on the downloaded form and send it to the head office of NSDL in Mumbai through a registered post.Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
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