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How National Pension Scheme (NPS) Costs Will Be Charged

01 December 2021

National Pension System or NPS is a voluntary retirement savings scheme by the Central Government. It encourages individuals to invest in a pension during their employment. There are two charges that are applicable for NPS, namely CRA (Central Recordkeeping Agency) and POP (Points of Presence) charges.

This article will offer an overview of these charges. It will also delve into how an NPS calculator can help you ascertain the costs. 

What are the POP Charges for NPS?

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

NPS intermediary

Charges

Charged under heading

Point of Presence (POP) Rs. 200 Subscriber registration charges
0.25% of one’s contribution (subject to a maximum of Rs. 25,000 and a minimum of Rs. 20)

Rs. 20 for non-financial ones

Any subsequent transaction
Rs. 50 per annum Persistency, i.e. less than 6 months and Rs. 1000 contribution
0.10% of the contribution (minimum Rs. 10 and maximum Rs. 10,000) Contribution via eNPS

Here, it is critical to note that the above charges are collected upfront from subscribers.

What are the CRA Charges for NPS?

Discussed below are the CRA and other intermediary charges of NPS:

Intermediary 

Charges

Charged under heading

Central Recordkeeping Agency (CRA) Rs. 69 for NCRA and Rs. 57.63 for KCRA Yearly PRA maintenance charges (per NPS account)
NCRA: Rs. 40 (if a subscriber opts for physical PRAN card),

Rs. 35 (for ePRAN card with physical welcome kit) and Rs. 18 (for ePRAN card with welcome kit sent via email only)

KCRA: Rs. 39.36 (if a subscriber opts for physical PRAN card),

Rs. 39.36 (for ePRAN card with physical welcome kit) and Rs. 4 (for ePRAN card with welcome kit sent via email only)

PRA opening costs
Rs. 3.75 for NCRA and Rs. 3.36 for KCRA Cost per transaction
Custodian 0.0032% per annum for electronic and physical segment Asset servicing costs
Pension Fund Manager (PFM)  Varies with slabs of AUM under the PF:

Up to Rs. 10,000 crore = 0.09%

Rs.10,001 crore to Rs. 50,000 crore = 0.06%

Rs. 50,001 crore to Rs. 1,50,000 crore = 0.05%

More than Rs. 1,50,000 crore = 0.03%

Fees for investment management 
Trustee Bank Nil
NPS Trust 0.005% per annum Reimbursement of expenses

Here are various NPS payment gateway service charge 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

What is an NPS Calculator, and How It Can Be of Help?

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

Here is how you can use the NPS calculator:

  • Step 1: Submit the sum that you wish to invest every month in the pension scheme and towards your retirement corpus
  • Step 2: Then, you need to furnish your current age
  • Step 3: By using the slider, enter your expected rate of return
  • Step 4: You will instantly see the desired results on your screen

For clearer understanding, let’s take an example:

Mr. Verma is 30 years old and wants to invest in the NPS scheme. He is planning to invest a sum of Rs. 12,000 per month towards his retirement corpus. His expected rate of return is 8% per annum. 

When Groww’s NPS calculator is used, it provides the following results:

From the above information, Mr. Verma can have a fundamental idea of the total investment value, interest earned, maturity amount, and the minimum annuity investment.

Here are the ways in which the NPS calculator will assist you:

  • It helps you determine the amount that you are entitled to receive in the future. As a result, you can ascertain your investment corpus and take decisions according to your financial goals.
  • You can evaluate the monthly pension based on your total corpus at the time of retirement.

Prospective NPS subscribers must note that the NPS calculator indicates approximate or expected figures. It doesn’t represent the exact amounts.

Take away

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

Happy Investing!

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