In case if you have logged in to your NPS Portal recently you get an option about “Shift to eNPS”. In this post we explain about What is eNPS, the benefits of eNPS and process to shift to eNPS.
eNPS is NPS account which has been opened by subscribers using Aadhaar on CRA portal only i.e. account was opened online without visiting any of the POP-SP (Point of Presence – Service Providers). Since eNPS was not available earlier so most of accounts that were opened earlier were using POP-SP.
Also Read: NPS Tax Benefit u/s 80CCD(1), 80CCD(2) and 80CCD(1B)
The short answer to what you should switch to eNPS is because it lowers your investment cost to NPS. Here is the detailed explanation.
PFRDA, the regulator for NPS had revised the charges for POP-SP in October 27, 2017. Below is the snapshot of the new charges.
Also Read: Should you Invest Rs 50,000 in NPS to Save Tax u/s 80CCD (1B)?
The upper half which has to be collected upfront has anyway already been paid by subscribers while opening the NPS account. But two additional charges are also paid as follows:
Also Read: 5 Steps to Transfer EPF to NPS
Though the charges are not high but seems useless as NO further service is being provided by POP. Also, these charges may keep of revising as happened with the above notification where the subsequent contribution charges where revised from 0.05% to 0.10%. The Persistency charge is also new from 2017.
If you contribute Rs 50,000 in NPS in one go, then keeping your POP would cost you Rs 118. In case you do investment in multiple installments, the charges would go up.
Hence my advice is to shift to eNPS and save these unnecessary charges and uncertainty in these charges in future. This is like shifting to Direct Plan from Regular Plan in Mutual Funds.
I do not see any drawback of this switch, if you know of any please share.
Thankfully switching to eNPS is easy and can be done from the NPS Portal. We share the steps with screenshots below:
Step 1: Login to Your NPS Account
Step 2: Select “Shift to eNPS” from Menu
Step 3: Confirm the Details
Also Read: NPS – Maturity, Partial Withdrawal & Early Exit Rules
Step 4: Enter OTP that you get on your registered mobile number
Finally, you get the Acknowledgement
Also Read: How to Save Income Tax for Salaried and Professionals for FY 2018-19?
I got the below email from cra@nsdl.co.in confirming the shift to eNPS was complete the same day.
If you had used POP to open NPS, its good idea to Shift to eNPS. Given that it is easy to do with click of some buttons, you must do it and reduce your cost of investment.
Everyone hates paying taxes and always are on lookout for Options to Save Tax. However…
Are you worried and confused about Lien amount in SBI? Well you are not alone.…
Get details of latest Sovereign Gold Bond Price, Issue details, taxation and how to invest.…
Download the Excel based Income Tax Calculator India for FY 2020-21 (AY 2021-22). This compares…
Piramal Capital & Housing Finance, has come out with Piramal Capital & Housing Finance Ltd…
IIFL Home Loan, the Housing Finance company from IIFL Group has come out with IIFL…
View Comments
Is it possible to shift only Tier 2 NPS account to eNPS?
Contribution to Tier 1 is done by my employer, can I shift that too to eNPS?
I'm in a situation similar to Raj. When I have a question related to NPS or Tier 1, I approach my POP and it gets promptly answered. So I guess I'll stick with the POP.
When I invest in NPS Tier 2 thru eNPS, say Rs 2K, I get charged additionally Rs 12 (which includes POP trail commission + Payment Gateway charge). Obviously, this POP trail commission for Tier 2 contribution is a needless amount I pay each time, for no service in return.
IF the account was opened by your employer, you need not shift to eNPS.