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.
Here are the fees associated with subscribing to a National Pension Service 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) |
|
This charge is collected upfront. |
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. |
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:
|
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 |
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.
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.
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!