How to open an NPS account in HDFC bank?

The national pension scheme (NPS) in India is a voluntary and life-long investment plan for retirement under the purview of the Pension Fund Regulatory and Development Authority (PFRDA) and the central government. This pension scheme is open for the employees of the public, private, and even the unorganized sector except those of the armed forces.

This scheme encourages employees to invest a certain amount in a pension account at regular intervals during their employment. After retirement, they can take out a certain percentage of the corpus. As an NPS account holder, you will receive the remaining amount in the form of a monthly pension post-retirement.

Let us understand how to open an NPS account in HDFC bank

Features and benefits of NPS through HDFC bank

HDFC bank is India’s leading private sector bank which offers several features and benefits for opening an NPS account through them. Let us understand their benefits and features:-

Regulated

The national pension scheme is regulated by the Pension fund regulatory and development authority under the government of India, which instills trust in users who are saving their money for the long run since it is regulated by the government of India

Tax benefit

With the help of opening NPS through HDFC bank, one can save up to Rs.1.5 Lacs under section 80C. One can also enjoy an additional tax deduction of Rs.50, 000 under section 80CCD (1B)

Minimal contribution

This is a great benefit provided by the bank as the minimum deposit required for making an NPS account is just Rs.500 per month or Rs.6000 per year.

Two accounts

Under the NPS scheme, you are offered two types of accounts, Tier I and Tier II. Tier I is a mandatory investment and both differ in terms of money withdrawn from them. You are not eligible to withdraw money from the Tier I account till you retire. Even then, there are some restrictions on the withdrawal limit. On the other hand, there is no limit to withdrawal in the Tier II account. The subscriber can draw the entire amount from the Tier II account.

Risk assessment

Since the NPS provides a 50% cap on equity exposure, it braces the risk-return equation from the investors. This keeps the corpus protected from the volatility of the equity market.

Eligibility scheme for HDFC’s pension scheme

The national pension scheme through HDFC bank is open for any Indian citizen if:-

1. The individual is of the age group 18 to 60

2. The applicant must be a KYC compliant

3. The applicant must not have an existing NPS account

How to open an NPS account in HDFC bank?

The step-by-step to open an NPS account in HDFC bank is as follows:-

1. If you are already a user of HDFC securities, log in using your trading id and password here

2. If not, then create a new HDFC account to get access to the HDFC website.

3. After login in, click on the “online NPS” option.

4. Fill up the form with your details and send it to the HDFC branch located near you along with your KYC documents attached.

5. You will be asked to pay Rs.500 during the application.

6. When the bank confirms your KYC details, Permanent Retirement Account (PRA) is created, and a “Unique Permanent Retirement Account Number (PRAN)” will be allotted where an individual can have only 1 PRAN

FAQS

1. What is the National Pension System (NPS)?

The NPS is a new contributory pension scheme launched by the Government of India with effect from 1 January 2004. NPS is regulated by Pension Fund Regulatory and Development Authority (PFRDA), was first introduced for government employees, and was opened for all citizens of India in 2009.

2. How can a subscriber get registered for NPS?

Any Individual who wants to get registered as a subscriber and wants to open a Permanent Retirement Account (PRA)(Tier I) in NPS would submit the duly filled form (Composite application form for subscriber registration) with other supporting KYC documents to HDFC Securities Ltd.

3. Where do I get the registration forms?

Application forms for registration for NPS can be downloaded from the www.hdfcsec.com website. You need to forward the duly filled subscriber registration form, photograph, 1st contribution cheque & self-attested KYC documents to HDFC securities corporate office at Kanjurmarg, Mumbai.