Most people open voluntary Tier-1 National Pension System (NPS) Account just to get additional tax benefit of up to Rs 50,000 in a financial year over and above the 80C limit of Rs 1.5 lakh. However, apart from tax benefits, NPS may be used effectively to generate a substantial retirement corpus and to have a regular money flow after retirement.

As NPS funds are invested in capital assets – like equity, debt instrument, bonds etc – their Net Asset Value (NAV) fluctuate every day depending on the market value of the underlying securities. This provides an opportunity to maximise the returns by making contributions either at low NAV or by making periodic investments to avail benefits of the rupee cost averaging.

Earlier, due to the long payment chain in NPS organisational structure, it was not possible to time the investments or start a Systematic Investment Plan (SIP).

The Provident Fund Regulatory and Development Authority (PFRDA) in 2020 provided the existing NPS subscribers – under Government / Non Government / All Citizens Model – Direct Remittance (D-Remit) as an additional option / mode to deposit their voluntary contribution to shorten the payment channel.

D-Remit is an electronic system through which money (minimum Rs 500 per transaction) can be directly transferred from your Bank account to the Trustee Bank by creating a Virtual ID linked to your Permanent Retirement Account Number (PRAN).

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Earlier, subscribers had NEFT and RTGS as payment options for D-Remit and IMPS has been added now as another payment option.

D-Remit not only eases the mode of deposit of voluntary contributions, but also optimises the investment returns, giving you an opportunity to get the same day NAV for your investment in NPS.

However, to get the same day NAV, you have to ensure that the contribution is received at Trustee Bank by 9.30 a.m. on any day except Saturday, Sunday and public holidays.

Moreover, the Virtual Account opened for D-Remit will not only help you avail the same day NAV, but will also allow you to set up daily/monthly/quarterly Systematic Investment through Auto Debit / Standing Instructions in net banking in favour of the Virtual Account.