The National Pension System (NPS) is largely focused on one’s retirement and is considered as one of the best investment tools for retirement planning in India. While investing in NPS, investors can choose from auto and active choice for deciding their allocation of assets. Under the auto choice, an investor can choose from either aggressive, moderate, or conservative funds, which changes, based on the subscriber’s age. In the active choice, on the other hand, the investor has to decide by himself how much allocation should be put to different asset classes. This allocation, however, doesn’t change with age and remains constant until the investor decides to change it.

Under both auto-choice and active-choice option, NPS now offers equity allocation up to 75 per cent, which was earlier capped at 50 per cent. Experts suggest this scheme will not only allow young investors to have higher exposure to equities but also help them earn higher returns for long-term goals like retirement. The Pension Fund Regulatory and Development Authority (PFRDA) has been taking various measures to make this scheme more consumer-friendly, ever since the rollout of NPS in 2008-09.

Here are the steps to join NPS account online:

  • Firstly, log on to the NPS Trust website.
  • Under the registration tab, click on the ‘Individual’ option.
  • Your e-KYC will be done through Aadhaar-OTP based authentication.
  • Enter your Aadhaar or PAN details, after which for verification, you will receive an OTP on the registered mobile number.
  • Select the type of account you want, from the option Tier I and Tier II account. (Under Tier I account, contributions are eligible for tax deduction benefit of up to Rs. 50,000 U/S 80CCD (1B), over and above Rs 1.5 lakh u/s 80C. Under Tier II account one can withdraw the entire accrued corpus any time and no tax benefits are available in this account.)
  • Next for authentication, you need to enter your OPT. For Aadhaar OTP you will receive a simple text, however, for PAN, you will be charged Rs 125 by the bank after your details are verified.
  • Now you will be needed to fill in your personal details, in the form, and then submit to generate the acknowledgment number.
  • There will be the option to choose a pension fund manager from any of the eight pension funds.
  • Next, you need to choose an investment mode, from auto mode, and active mode.
  • Now if you have selected active management, you will have to choose the investment mix and specify how you want to spread your corpus across various fund classes.
  • Next, assign your nominees, and fill in their details.
  • You will be needed to upload photograph and signature (Cheque and PAN for Tier II).
  • Enter the contribution amount that you want to invest in NPS and click for payment. The minimum amount is set at Rs 500 for Tier I and Rs 1,000 for Tier II accounts.
  • The online payment can be completed through credit and debit cards or NetBanking.
    Once the payment is completed, the Permanent Retirement Account Number (PRAN) will be allotted. (Only applicable for Aadhaar based NPS account opening)
  • After it is allotted, you can select the ‘eSign’ option in the eSign/Print and Courier page. (eSign charges applicable is Rs 25.90)
  • Feed-in the OTP that will be sent to your mobile number registered with the Aadhaar, for the purpose of authentication.
  • Once it is authenticated, the registration form will be successfully eSigned.
  • Note that, there is no need to send the physical copy of the form to CRA, once a document is eSigned.