National Pension System (NPS) Charges

NPS works on an unbundled architecture where multiple intermediaries (such as POP, CRA, Pension Fund Manager, Custodian, NPS Trust etc) are involved to perform different services. For each intermediary PFRDA has defined the charge structure as shown below. All the below charges are subject to change and are exclusive of GST.

 

Point of Presence (POP) Charges for NPS in India

POP charges are either taken upfront from the customer or recovered from the contribution amount deposited by the customer, as shown below:

Charge Head	Charges
Account Opening	Rs.400
Contribution Processing	0.50% subject to min Rs.30 and Max Rs.25,000
Non Financial Transaction Processing	Rs.30
Persistency (Applicable for Active Retail Customer with more than 6 months tenure with POP)	Rs.50/- per annum for annual contribution Rs.1000 to Rs.2999. Rs.75/- per annum for annual contribution Rs.3000 to Rs.6000. Rs.100/- per annum for annual contribution above Rs.6000.

 

 

Pension Fund Manager (PFM) Charges for NPS in India

Effective 1st April 2021, The Fund Management charge for PFMs has been revised. The new charge structure is slab – based according to their AUM slab. Maximum charge permissible against each slab is shown below :

AUM Slab (in Cr)	PFM Charge % for the slab
Up to Rs 10,000	0.09%
Rs 10,001 – Rs 50,000	0.06%
Rs 50,001 – Rs 1,50,000	0.05%
Rs 1,50,000 and above	0.03%

 

 

Central Record Keeping Agency (CRA) Charges for NPS in India

CRA recovers charges by cancelling units from customer’s NPS account on quarterly mode.

Charge Head	Charges for KFintech CRA	Charges for NSDL CRA
PRAN Generation	Rs.39.36	Rs.40.00
Annual Maintenance	Rs.57.63	Rs.69.00
Financial Transaction Processing	Rs.3.36	Rs.3.75

 

 

Other Intermediaries Charges for NPS in India

Charges for PFM, Custodian and NPS Trust are recovered on daily basis by adjusting NAV.

Intermediary	Charge Head	Charges (Annual)
Custodian	Custodian Fee	0.0032%
NPS Trust	Reimbursement of Expenses	0.003%

 

 

Payment Gateway Charges for NPS in India

For processing contribution online, the payment gateway service provider levies charges depending on the payment mode opted by the customer. These charges are levied to customers on each successful transaction.

Mode of Payment	Charges
RuPay Debit Card	Nil
UPI	Nil
Net Banking	Rs. 3.5
Credit Card	0.85% of the contribution amount

 

PGSP fund settlement time is T+1 day where T is the date of contribution made by subscriber

Steps to Use an NPS Calculator:

1. Define Your Financial Target:

First, specify the monthly amount you envision contributing towards your desired retirement corpus. This step helps evaluate your realistic contribution capacity.

2. Timeframe for Growth:

Next, input your current age. This informs the calculator about your investment horizon, crucial for estimating potential growth.

3. Risk-Return Trade-off:

Utilize the slider to set your anticipated rate of return. Remember, this reflects your risk tolerance and investment choices. Higher returns often come with greater volatility.

4. Unveiling Your Retirement Picture:

Click the calculation button, and witness your estimated retirement corpus materialize! The tool factors in your contributions, investment returns, and inflation for a comprehensive view.

Conclusion

Beyond the Numbers:

While NPS calculators offer valuable insights, they cannot encompass individual factors like future income variations or personal circumstances. Consulting a financial advisor for personalized guidance remains crucial.

Embracing Financial Security:

The NPS, a government-backed scheme, offers tax benefits and a guaranteed minimum pension. It’s a prudent choice for individuals seeking long-term financial security and a comfortable retirement transition.

Investing in Your Future, Wisely:

By utilizing NPS calculators and seeking professional advice, you take a proactive step towards a secure and fulfilling retirement. Remember, financial planning is a journey, not a destination.