NPS Tier 2 account: Users can't make payments using credit cards; here's what new rule says

The Pension Fund Regulatory and Development Authority (PFRDA) has announced that it will stop accepting payments via credit cards for Tier-2 account of the National Pension System (NPS). The PFRDA, in its circular, dated 3 August, has asked all points of presence (PoPs) to cease accepting credit card payments for Tier-2 account of NPS “with immediate effect”. The organisation has issued this circular “in exercise of the powers conferred under Section 14 of Pension Fund Regulatory and Development Authority Act, 2013 to protect the interest of subscribers and to regulate, promote and ensure healthy growth of the National Pension System and pension schemes to which the Act applies”. However, for Tier-1 account of the NPS credit card facility for payments will continue. Credit card users need to pay 0.60 percent (apart from Goods and Services Tax) as payment gateway charge for paying the NPS with a credit card via net banking.

The circular can be found on the PFRDA’s official website. For direct link, click here .

What is the NPS and its Tier system?

The National Pension Service was launched in 2004 by the Union government as a pension-cum-investment scheme. The NPS provides old age security to the citizens and is regulated by the PFRDA. The National Pension Scheme helps citizens effectively plan their retirement through “safe and regulated market-based return.” The NPS is divided into two categories- government employees and private sector workers. Any Indian citizen, between 18 and 60 years of age, can invest in the NPS.

NPS Tier-1: This is best for retirement savings. It is a long term investment and cannot be withdrawn until the time of retirement. Tax benefits can be availed by subscribers.

NPS Tier-2: It is a voluntary account that can be opened only if the subscribers already have a Tier-1 account. The minimum investment is Rs 1,000. No tax benefits can be availed.

How to make NPS Tier-II payment?

Subscribers can make the National Pension Service Tier-II payment online by either the NPS mobile app or visiting  https://enps.nsdl.com/eNPS to pay through net banking or debit card. For offline payments, they can contact the associated Nodal Office or POP-SP.

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