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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 the Central Government employees only. However, NPS was subsequently extended by the Pension Fund Regulatory and Development Authority (PFRDA) to all citizens. So, now an employee belonging to the private sector or someone who is 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:

  • NPS accounts can be opened at Point of Presence-Service Provider (POP-SP) banks.  SBI is one such bank which accepts the application form and the required documents, getting the subscribers registered with the Central Recordkeeping 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 an individual to apply for the SBI National Pension Scheme are:

(i) An individual should be between the age of 18 to 60 years.

(ii) Based on the KYC norms the following documentation is required:

  • Photo Id proof
  • Date of birth proof
  • Address proof
  • Application form

(iii) In the case of Tier I type of NPS account:

  • The minimum contribution for account opening is Rs.500
  • The minimum amount payable for every contribution is Rs. 500
  • The minimum Required Account Balance at the end of every financial year is Rs. 6,000
  • There must be at least 1 minimum contribution during a year.

(iv) In the case of Tier II type of NPS account:

  • The minimum contribution for account opening is Rs.1,000
  • The minimum amount payable for every contribution is Rs. 250
  • The minimum Required Account Balance at the end of every financial year is Rs. 2,000
  • There must be at least 1 minimum contribution during a year.

(v) For an NPS Tier II account, an individual has to first open an active Tier I account for activating the Tier II account.

(vi) There is a minimum contribution of Rs. 1500 at the time of account opening for a composite account for Tier I and Tier II together.

(vii) It is mandatory to submit a cancelled cheque for a composite application or Tier II application with the application form.

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

You should have the following documents ready:

  • Aadhar Card and PAN number; these must be linked with your SBI account
  • Netbanking facility or debit card
  • Scanned image of a passport size photo
  • Scanned image of your signature

(i) Log on to the NPS website

(ii) Click on ‘registration’ and choose ‘Individual’ 

(iii) Enter your PAN/Aadhar Card number and an OTP will be sent to the registered mobile number for verification

(iv) Choose a type of account – Tier I or Tier II.

(v) Enter your OTP and your personal details. If Aadhar is used, some details will be prefilled in the form. Submit to generate an acknowledgment number.

(vi) You will have to then choose from any of the several Pension Funds provided in the NPS list on the portal. In this case choose SBI Pension Fund Pvt. Limited.

(vii) You have to then choose the mode of Investment.  In the case of an auto mode, the equity allocation changes with age. With active mode, you decide the mix.

(viii) Next, assign your Nominee(s) by providing the details of people who should get the corpus in the eventuality of the investor’s death.

(ix) If Aadhar Card is not used you will be required to upload a passport size image. If Aadhar has been used, then only a signature needs to be uploaded.

(x) The next step is to make a contribution to the NPS account and get a PRAN. The 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

As a final step, take a print of the completed form, paste your photo, sign it and mail the same within 90 days to the CRA office.

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