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1. What is an NPS (National Pension Scheme) Account?

The NPS is a social security scheme launched by the central government of India. The New Pension Scheme is a contribution based scheme that provides market-linked returns to pensioners. It was initially aimed at central government employees only. However, NPS was subsequently extended by the Pension Fund Regulatory and Development Authority (PFRDA) to all citizens. So now any employee belonging to private sector or self-employed can avail of the new pension scheme. It also offers portability across various locations and jobs.

SBI is one of the banks where you can open an NPS account.

2. Features of an NPS Account

The following are the salient features for both Tier I and Tier II types of NPS accounts:

  • The NPS accounts can be opened at Point of Presence-Service Provider (POP-SP) banks.  SBI is one such bank which will accept the application form and the required documents getting the subscribers registered with Central Record keeping Agency (CRA) to generate the Permanent Retirement Account Number (PRAN).
  • The PRAN will be needed for quoting in all future transactions.
  • Tier I and Tier II are the options available.

3. Eligibility for SBI’s National Pension Scheme

The most important eligibility criteria for the individual to apply for the SBI National Pension Scheme are:

  1. An individual should be between the age of 18 to 60 years.
  2. Based on the KYC norms the following documentation are required:
    1. Photo Id proof
    2. Date of birth proof
    3. Address proof
    4. Application form
  3. In case of Tier I type of NPS account:
    1. Minimum contribution for account opening is Rs.500
    2. Minimum amount payable for every contribution is Rs. 500
    3. Minimum Required Account Balance at the end of every financial year is Rs. 6,000
    4. There must be at least 1 minimum contribution during a year.
  4. In case of Tier II type of NPS account:
    1. Minimum contribution for account opening is Rs.1,000
    2. Minimum amount payable for every contribution is Rs. 250
    3. Minimum Required Account Balance at the end of every financial year is Rs. 2,000
    4. There must be at least 1 minimum contribution during a year.
  5. For an NPS Tier II account, an individual has to first open an active Tier I account for activating the Tier II account.
  6. There has to be a minimum contribution at the time of account opening is Rs. 1500 at the time of making a composite application is being made for Tier I and Tier II together.
  7. It is mandatory to submit a cancelled cheque for composite application or Tier II application with the application form.

4. Step by Step Guide for opening an NPS account online with SBI

  1. You should have the following ready.
    1. Aadhar Card and PAN number and those should be linked with your SBI account.
    2. Netbanking facility or debit card.
    3. Scanned image of Passport size photo.
    4. Scanned image of Signature.
  2. Log on to the NPS website.
  3. Click on registration and choose ‘Individual’ Read more.
  4. Enter your PAN/Aadhar Card number and an OTP will be sent on the registered mobile number for verification.
  5. Choose a type of account Tier I or Tier II.
  6. Enter your OTP and enter your personal details. If Aadhar is used, many details will be prefilled in the form. Submit to generate acknowledgement number.
  7. You have to then choose any of several Pension Funds provided in the NPS list on the portal. In this case choose SBI Pension Fund Pvt. Limited.
  8. You have to then choose the mode of Investment.  In auto mode, equity allocation changes with age. In active mode, you decide the mix.
  9. You then need to assign your Nominees by providing details of the people who should get the corpus in case of the death of the investor.
  10. You are then required to upload the passport size image if Aadhar card is not used. If Aadhar is used, only signature needs to be uploaded.
  11. Next step is to make a contribution to the NPS account and get a PRAN. Minimum amount is Rs 500 for Tier I and Rs 1,000 for Tier II. Pursuant to payment being approved, a PRAN would be allotted
  12. You need to then take a print of the completed form, stick your photo, sign it and mail within 90 days to CRA office.

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