How To Open NPS Account Online In Sbi

SBI stands for State Bank of India. It is a government-owned multinational public-sector bank with its headquarters in Mumbai, India. It is one of the largest banks in India in terms of assets, deposits, branches, and employees. SBI offers a wide range of banking and financial services to individuals, businesses, and corporates in India and overseas. It has a network of over 22,000 branches in India and around 190 overseas offices in 36 countries. SBI offers various products and services such as savings accounts, current accounts, loans, credit cards, investment products, insurance, and digital banking services.

NPS stands for National Pension System. It is a voluntary, defined contribution retirement savings scheme launched by the Government of India in 2004. It is regulated by the Pension Fund Regulatory and Development Authority (PFRDA). NPS aims to provide pension income to its subscribers in their old age by encouraging them to save regularly during their working life.

Under the NPS, individuals can open a pension account and contribute to it regularly till retirement. The contributions made by the subscriber are invested in a mix of equity, corporate bonds, and government securities by Pension Fund Managers (PFMs) appointed by PFRDA. The accumulated amount, along with the returns generated, is paid to the subscriber as a pension after retirement.

NPS offers two types of accounts: Tier-I and Tier-II. Tier-I account is a mandatory account, while Tier-II is an optional account. The minimum contribution for a Tier-I account is Rs. 500 per month or Rs. 6,000 per annum. It also offers tax benefits to subscribers under Section 80C and Section 80CCD of the Income Tax Act.

Features Of An NPS Account

Here are some of the features of an NPS (National Pension System) account:

1. Voluntary: NPS is a voluntary pension scheme. Any citizen of India between the ages of 18 and 65 can open an NPS account.
2. Defined contribution: NPS is a defined contribution scheme, which means that the amount of pension you receive is based on the contributions made by you and the returns generated by the pension fund.
3. Tier-I and Tier-II accounts: NPS offers two types of accounts – Tier-I and Tier-II. Tier-I is a mandatory account that comes with restrictions on withdrawal, whereas Tier-II is a voluntary account that allows the subscriber to withdraw money anytime.
4. Investment options: NPS offers a range of investment options to its subscribers, including equity funds, corporate bonds, and government securities. The subscriber can choose their preferred investment option based on their risk appetite and investment goals.
5. Pension Fund Managers (PFMs): NPS allows subscribers to choose from several Pension Fund Managers (PFMs) to manage their investments. The PFMs are regulated by the Pension Fund Regulatory and Development Authority (PFRDA).
6. Tax benefits: NPS offers tax benefits to its subscribers. The contributions made towards the NPS account are eligible for tax deduction under Section 80C of the Income Tax Act, and an additional deduction of up to Rs. 50,000 is available under Section 80CCD (1B).
7. Annuity options: After retirement, the subscriber can use the accumulated corpus to purchase an annuity plan from an insurance company. NPS offers various annuity options, including life annuity, joint life annuity, and an annuity with a return of purchase price.

To be eligible to open an NPS (National Pension System) account with SBI (State Bank of India), you must fulfil the following eligibility criteria:

1. Age: You must be between the ages of 18 and 65 years at the time of opening the NPS account.
2. Citizenship: You must be a citizen of India to open an NPS account with SBI.
3. KYC compliance: You must be KYC (Know Your Customer) compliant to open an NPS account. This means you must provide valid identity proof, address proof, and a photograph to SBI.
4. Bank account: You must have an active savings account with SBI or any other bank to make contributions towards the NPS account.
5. PAN: You must have a valid PAN (Permanent Account Number) to open an NPS account.
6. Contribution amount: The minimum contribution amount for an NPS Tier-I account is Rs. 500 per month or Rs. 6,000 per annum. There is no maximum limit on contributions, but tax benefits are available only up to a maximum of Rs. 2 lacks per annum.

Here is a step-by-step guide for opening an NPS (National Pension System) account online with SBI (State Bank of India):

1. Visit the SBI eNPS portal: Go to the SBI eNPS portal at https://enps.nsdl.com/eNPS/NationalPensionSystem.html
2. Click on “National Pension System”: Click on “National Pension System” on the homepage of the eNPS portal.
3. Click on “Registration”: Click on “Registration” on the top menu bar of the page.
4. Choose your account type: Select “Individual Subscriber” as your account type.
5. Choose your account status: Choose whether you are an existing SBI customer or a new customer.
6. Provide your PAN details: Enter your PAN (Permanent Account Number) details.
7. Enter your personal details: Enter your personal details such as name, date of birth, and contact details.
8. Choose your bank and upload documents: Select your bank from the list of banks, and upload the required documents such as address proof and photograph.
9. Generate OTP and authenticate: Generate an OTP (One-Time Password) and authenticate your details.
10. Make the payment: Make the initial contribution towards your NPS account. The minimum contribution amount is Rs. 500 per month or Rs. 6,000 per annum.
11. Select your Pension Fund Manager (PFM): Choose your preferred Pension Fund Manager (PFM) from the list of PFMs.
12. Submit your application: Review your application and submit it.
13. Receive your PRAN: After the submission of the application, you will receive a Permanent Retirement Account Number (PRAN) from the Central Record Keeping Agency (CRA) within a few days.

The following factors are considered in calculating the NPS:

1. Contributions made: The amount of contribution made by you towards the NPS account determines the corpus or the total amount of money accumulated in your account.
2. Investment returns: The investment returns generated by the Pension Fund Manager (PFM) appointed by you also impact the corpus. The PFMs invest the corpus in various asset classes such as equity, corporate bonds, and government securities to generate returns.
3. Retirement age: The age at which you retire also plays a role in determining the pension amount. If you retire at the age of 60 years, you can withdraw up to 60% of the accumulated corpus as a lump sum, and the remaining 40% must be used to purchase an annuity plan from an insurance company.
4. Annuity rates: The annuity rates offered by the insurance company also determine the pension amount. The annuity rates depend on various factors such as the type of annuity plan chosen, the age of the annuitant, and the prevailing market conditions.

To sum it up, the NPS corpus is the sum of the contributions made by the subscriber and the returns generated by the investments made by the Pension Fund Manager. After retirement, the corpus is used to purchase an annuity plan, which provides a regular pension income. The pension amount received by the subscriber depends on the annuity rates offered by the insurance company.

Deductions for National Pension System (NPS) contributions are allowed under Section 80CCD(1), 80CCD(1B) and 80CCD(2) of the Income Tax Act, 1961. The following deductions are allowed for NPS contributions:

1. Section 80CCD(1): The maximum deduction allowed under Section 80CCD(1) is 10% of the salary (for employees) or 10% of the gross income (for self-employed individuals). The deduction is capped at Rs. 1.5 lakh in a financial year. This deduction is available to all individuals, including NRIs.
2. Section 80CCD(1B): An additional deduction of up to Rs. 50,000 is allowed under Section 80CCD(1B) over and above the limit of Section 80C. This deduction is available to all individuals, including NRIs.
3. Section 80CCD(2): For salaried individuals, an additional deduction of up to 10% of the basic salary and dearness allowance (DA) is allowed under Section 80CCD(2). There is no upper limit on this deduction. However, the total deduction claimed under Section 80C, 80CCC and 80CCD(1) should not exceed Rs. 1.5 lakh.