In NPS, though, the fee is deducted from the customer’s account and does not change from one pension fund to another. In mutual fund schemes or insurance policies, it is the individual fund house or insurance company that pays the agent and commissions can differ between companies. It is important to note that the fee is not paid by the pension fund. The fee too isn’t large compared to what insurance agents or mutual fund distributors charge. “This venture can greatly expand the scope and reach of NPS," said Shukla referring to Paytm Money’s foray. The tax treatment of NPS has also considerably improved over time. NPS is an important ingredient in your retirement planning pie, particularly for young people who can harness the power of equities to build a corpus. A user can register for NPS and make contributions online through the Paytm Money app." “Whatever is done through a bank branch can also be done through an app," said Sumit Shukla, CEO, HDFC Pension Management Co. In response to a Mint questionnaire, Paytm Money said, “All commitments towards NPS will be fulfilled by Paytm Money. The delivery of these too, in app format remains to be seen. The regulations also lay down additional duties for PoPs like answering subscriber queries and processing withdrawals. It is unclear whether this process can be easily replicated on an app. Thereafter, subscribers can either e-sign the forms or print and send the signed form to the NSDL office. This is a compilation of all things that can be improved in it. This involves filling an online form, uploading your signature and photograph. As part of writing this story, I spent a lot of time with the Tamil version of Paytm app.
PFRDA regulations lay down that a PoP must facilitate the initial registration of subscribers. If you open an account through Paytm Money or any other PoP, you can make subsequent contributions or administrative requests through one of the two CRAs.
CRAs are tasked with record keeping in NPS and can also process various subscriber requests like fund manager switches. But a subscriber who opens his NPS account through a PoP but subsequently contributes through eNPS (a the platform used by CRAs, NSDL and Karvy) pays a lower commission of 0.10% to the PoP.Ĭurrently, if you want to invest online directly, without the PoPs, you can do so via eNPS offered by CRAs NSDL and Karvy.
Remember that if you open an NPS account through a CRA, you will be able to avoid the additional layer of fees that online and offline PoPs charge. There are different charges if you open an account directly with a Central Record-Keeping Agency (CRA) (see graph).
In response to an emailed questionnaire about its charges, Paytm Money said that more information will be shared at the “time of launch".īoth online PoPs such as Paytm Money and offline PoPs such as banks are allowed to charge ₹200 on the initial subscriber registration and contribution.