NPS: Pay these charges on opening the National Pension System account online or offline

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Updated: Jul 31, 2020 4:20 PM

In addition to the fund management charge in NPS, there are some charges levied at the POP level while some are charged by the CRA.

 nps charges sbi, hdfc, nsdl, National pension system, account, online, karvy, popNPS Charges: The fund management charge in NPS is called Investment Management Fee and is 0.01 per cent.

NPS Charges NSDL: The National Pension System (NPS) is a low-cost investment that aims at accumulating funds for retirement. All investments that are linked to market-returns have certain charges. Such charges basically eat into the returns and hence the lower the charges, the better will be the maturity value, assuming the growth is the same. Most important of all the charges is the ‘fund management cost’ and has a direct impact on the effective returns to the investor.

The fund management charge in NPS is called Investment Management Fee and is 0.01 per cent. It means, for every Rs 10 lakh, the fee is Rs 100, which is paid to the pension fund managers to manage the NPS money across different assets.

However, there are quite a few other charges as well. The Pension Fund Regulatory and Development Authority (PFRDA), the government body that regulates NPS, has defined them clearly and even capped them.

Some of the charges are at the POP level while some at the CRA level.

Points of Presence (POPs) are places such as banks appointed by PFRDA where one goes to open NPS account. POPs provide the services like subscriber registration, issuance of statement etc. As far as administration and record-keeping is concerned, the CRA is responsible for it. NSDL e-Governance Infrastructure Central Recordkeeping Agency (CRA) and Karvy Computershare are two such CRAs.

So, if you want to know the NPS charges in opening account with SBI or HDFC Bank, the POP charges will apply, while NPS charges at NSDL or Karvy will apply as the CRA charges.

The NPS charges are broadly across 5 levels:

  • CRA – NSDL and Karvy are the two CRAs
  • POP
  • Custodian
  • Investment Management Fee
  • NPS Trust

I. CRA CHARGES

At the CRA level, there are three sub-heads:

  • PRA Opening charges
  • Annual PRA Maintenance cost per account
  • Charge per transaction

All these three charges excluding taxes for the private sector NPS subscriber will depend on mode of transaction – offline or Online

A) PRA Opening charges – NSDL CRA (NCRA)

CRA charges for account opening if the subscriber opts for Physical PRAN card: Rs. 40

CRA charges for account opening if the subscriber opts for ePRAN card (in Rs.)

  • Welcome kit sent in physical: Rs. 35
  • Welcome kit sent vide email only: Rs. 18

This means, by applying online and opting for ePRAN with kit being delivered online, you end up paying Rs 18 compared to Rs 40 in the offline mode.

PRA Opening charges – Karvy CRA (KCRA)

CRA charges for account opening if the subscriber opts for Physical PRAN card: Rs. 39.36

CRA charges for account opening if the subscriber opts for ePRAN card:

  • Welcome kit sent in physical: Rs. 39.36
  • Welcome kit sent vide email only: Rs. 4

This means, by applying online and opting for ePRAN with kit being delivered online, you end up paying Rs 4 compared to Rs 39.36 in the offline mode.

B) Annual PRA Maintenance cost per account

NCRA: Rs. 95
KCRA: Rs. 57.63

C) Charge per transaction

NCRA: Rs. 3.75
KCRA: Rs. 3.36

II. Point of Purchase (POP)

A) Initial subscriber registration and contribution upload: Rs. 200

B) Any subsequent transactions: 0.25% of contribution (Min. Rs. 20 Max. Rs. 25000; Non-Financial Rs. 20)

C) Persistency: For more than 6 months and Rs 1000 contribution: Rs. 50 per annum

D) Contribution through eNPS: 0.10% of contribution (Min. Rs.10 Max. Rs.10,000)

III. Custodian

Asset Servicing charges: 0.0032 per cent per annum for electronic segment and physical segment

IV. Pension Fund charges

Investment Management Fee: 0.01 per cent per annum.

V. NPS Trust

Reimbursement of Expenses: 0.005 per cent per annum.

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