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National Pension Scheme (NPS) is one of the popular retirement savings schemes in India. If you want to initiate systematic investment plan (SIP) facility to make periodic contributions to your NPS account, you can do so in two ways. Needless to say, one must have an NPS account with active permanent retirement account number (PRAN).

One way is to approach the bank (POP- Point of Presence) in which you opened your NPS account and provide a standing instruction to the bank to make periodic payments to your NPS account.The other way is to do it digitally using the D-Remit facility introduced by the pension regulator, PFRDA, in October 2020.

D-Remit is an electronic system through which money can be directly transferred from the bank account to the NPS bank account instead of going through the intermediary (service provider) account.

The primary intent of introducing a D-Remit facility is to provide same day Net Asset Value (NAV) for investment in NPS.

Earlier, when NPS contribution was made without the D-Remit system, NAV on T+2 basis was considered.

Under the D-Remit system, a virtual ID would be created. All existing subscribers under government/non-government/all citizens model would be able to deposit their voluntary contributions by creating a virtual id linked to the permanent retirement account number.

The pre-requisites to register for a virtual ID for D-Remit are active NPS PRAN, mobile number, internet banking facility with your bank.

To initiate the process, go to your record keeping agencies’ website https://enps.kfintech.com/ or https://npscra.nsdl.co.in/. Click on ‘generate virtual ID’ and select the accounts for which you want to make the periodic payments; Under NPS, there are two account types — Tier I and Tier II.

Tier I is the primary retirement account with withdrawal restrictions until the age of 60 and Tier II is an account that can be opened only after Tier I is active and do not have contribution and withdrawal restrictions.

One day after the registration, the virtual account becomes active and the confirmation with virtual ID will be sent to your mail ID. Two separate virtual IDs will be generated if both the accounts are selected for virtual ID creation.

The next step is to add the ID as beneficiary in your bank net banking facility. The IFSC number of the payee bank will also be mailed to you.

After adding the virtual account as a beneficiary, you can set a standing instruction through the same internet banking login for investing a specified amount for a specified period on a regular interval to your NPS accounts.

Post that, the money will be auto-debited from your bank account periodically.

Please note that the minimum contribution amount through D-Remit feature is 500 and above for both the accounts.

You use RTGS/NEFT/IMPS as the mode of remittance for utilising the facility of D-Remit.

The difference between the two ways of setting up a SIP for NPS account is that through D-Remit, the entire process can be done online with out going to your POP bank branch.

Also, in terms of cost, the D-Remit facility would be beneficial to the investor.

As per a PFRDA official who doesn’t wish to be named, the cost per transaction when SIP is initiated through a POP is 20+ GST, while it is none in case of D-Remit facility.

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