How National Pension Scheme (NPS) Costs Will Be Charged

13 October 2023
3 min read
How National Pension Scheme (NPS) Costs Will Be Charged
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National Pension System or NPS is the Central Government's voluntary retirement savings scheme. It encourages individuals to invest in a pension during their employment. Two charges are applicable for NPS: CRA (Central Recordkeeping Agency) and POP (Points of Presence).

In this blog, we have offered an overview of the charges associated with the National Pension Scheme. It will also explore how an NPS calculator can help you ascertain the costs.

National Pension Scheme Fees & Charges

Here are the fees associated with subscribing to a National Pension Service in India-

Point Of Presence (POP) Charges for NPS in India

The table given below highlights the various POP charges for NPS-

POP Charges for NPS

Charges

The Method Through Which Charges Are Deducted

Account Opening       

₹400

This charge is collected upfront.

Contribution Processing

0.50% subject to min ₹30 and Max ₹25,000

This charge is collected upfront.

Non-Financial Transaction Processing

₹30

This charge is collected upfront.

Persistency (Applicable for Active Retail Customers with more than 6 months tenure with POP)

  • ₹50/- per annum for annual contributions of 1000 to ₹2999

  • ₹75/- per annum for annual contributions of ₹3000 to ₹6000

  • ₹100/- per annum for annual contributions above ₹6000.

This charge is collected upfront.

Central Recordkeeping Agency (CRA) Charges for NPS in India

The table given below highlights the various CRA charges for NPS-

CRA Charges for NPS

Charges

The Method Through Which Charges Are Deducted

PRA Opening Charges

₹50

Cancellation of Units.

Annual PRA Maintenance Costs (per account)

₹225

Cancellation of Units.

Charges Per Registration

₹5

Cancellation of Units.

Other Intermediary Charges for NPS in India

Discussed below are the other intermediary charges of NPS:

TRUSTEE BANK-

Charges for NPS

Charges

The Method Through Which Charges Are Deducted

Transactions Emanating from RBI Locations (per transaction)

₹0

Deduction of NAV

Transactions Emanating from Non-RBI Locations (per transaction)

₹15

Deduction of NAV

 PENSION FUND MANAGER (PFM) CHARGES-

Charges for NPS

Charges

The Method Through Which Charges Are Deducted

Investment Management Fees

Slabs of AUM managed by the Pension Fund:

  • Up to 10,000 Cr. – 0.09%*
  • 10,001 – 50,000 Cr. – 0.06%
  • 50,001 – 1,50,000 Cr. – 0.05%
  • Above 1,50,000 Cr. – 0.03%

Deduction of NAV

 CUSTODIAN-

Charges for NPS

Charges

The Method Through Which Charges Are Deducted

Asset Servicing Charges

  • 0.0075% p.a. (Electronic Segment)
  • 0.05% p.a. (Physical Segment)

Deduction of NAV

NPS TRUST-

Charges for NPS

Charges

Reimbursement of Expenses

0.005% per annum

NPS Payment Gateway Service Charges for NPS in India

Here are various NPS payment gateway service charges applicable for transactions on the eNPS platform-

Payment Mode

Rate of Quotation Per Transaction

Charges

Debit Cards  

Free

Not Applicable

Credit Cards

Percentage of Transaction Value

0.75%

UPI

Free

Not Applicable

Internet Banking

Flat Rate as Per INR

0

Prospective investors can use NPS calculators offered by platforms such as Groww to plan their investments. It also helps determine the maturity amount based on their monthly contribution, age, and expected return.

Steps to Use an NPS Calculator:

STEP 1: Submit the sum you wish to invest monthly in the pension scheme and toward your retirement corpus.

STEP 2: Then, you need to furnish your current age.

STEP 3: Using the slider, enter your expected rate of return.

STEP 4: You will instantly see the desired results on your screen.

Conclusion

In conclusion, the National Pension System Trust is a specialized Pension Fund Regulatory and Development Authority branch that reports to the Indian government's Ministry of Finance.

NPS investment is a sound financial decision for individuals who plan to retire early and have a low-risk appetite. Salaried individuals can also claim an income tax deduction.

Happy Investing!

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

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