NPS: How to set up a SIP and get a NAV the same day

NPS: How to configure a SIP and get a NAV the same day | Photo credit: Thinkstock

The Pension Fund Development and Regulation Authority (PFRDA) which manages the National Pension System (NPS) has facilitated the transfer of money to its subscribers from their bank accounts.

What is the NPS

The National Pension System (NPS) is a retirement and investment scheme launched by the government to provide old age security to Indian citizens. It offers an attractive long-term savings opportunity to effectively plan for your retirement with a secure and regulated market-based return. National Pension System Trust (NPST) established by PFRDA is the registered owner of all assets under NPS.

This new feature has made it easier to invest in NPS, allowing the NPS subscriber to obtain a same day NAV for their investment. An NPS investor can also make regular periodic payments, just like a systematic mutual fund investment plan (SIP) from their bank accounts.

Any Indian citizen (resident and non-resident) in the 18-65 age range (on the date of submitting the NPS application) can join the NPS.

D-Remit facility for same-day net asset value

Using the D-Remit feature, NPS subscribers can directly transfer money from their bank accounts to NPS accounts on the same day via NEFT or RTGS and get NAVs on the same day.

D-Remit not only facilitates the method of depositing voluntary contributions by subscribers, but would also optimize returns on investment by providing same-day NAV on investments, if the contribution is received at the fiduciary bank before 8:30 a.m. any bank operating day except Saturday, Sunday and holidays.

In addition, D-Remit allows a subscriber to set up systematic investment via automatic / standing debit instructions in net banking whereby periodic and regular contributions can be made i.e. daily, monthly , quarterly, etc.

The minimum value of D Remit is Rs. 500 per transaction in Level I and Level II accounts. Virtual identifiers are unique for levels I and II.

To obtain the NAV on the same day, the direct remittance (D-Remit) must be made to Trustee Bank (currently Axis Bank) instead of going through the intermediary account (service provider).

A subscriber only needs a virtual identifier (account) with the fiduciary bank to use the D-Remit function. The virtual account with the fiduciary bank can only be used for the payment of NPS contributions.

The net asset value (NAV) is the price of a unit in a fund. The net asset value is calculated at the end of each business day. It is calculated by adding the value of all securities and cash in the fund’s portfolio (its assets), subtracting the fund’s liabilities and dividing that number by the number of units the fund has issued. The net asset value increases (or decreases) as the value of the fund’s holdings increases (or decreases).

How to configure D-Remit

D-Remit would be required to access the CRA system and generate a virtual ID linked to their PRAN. After authorization of the virtual ID, subscribers can log into their net banking and add the virtual ID generated as a beneficiary, with the IFSC code UTIB0CCH274 to transfer the money via NEFT / RTGS / IMPS for their contributions volunteers. For the transfer of funds via online banking, the subscriber must write the narration as NPS contribution for D-Remit.

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