Business

How do you open a Level II NPS account?

The government provides applicants with a National Pension Plan or Level II NPS account. It works just like a regular bank account and has no mandatory withdrawal rules or a fixed interest rate. To open an account online, you must visit the eNPS website, click on ‘Activate Level II’, enter details on the next page and verify. If you are opening an offline Tier II account, use ‘Applicant’s POP-SP’, download the form, fill in your bank details and submit.

Features of NPS Level II account: Level II NPS account holders have the advantage of flexibility, which means that subscribers are free to choose any NPS investment option. They can even switch from one investment option to another. There are no restrictions on withdrawals deposited in NPS Tier II accounts, and it takes the risks involved into consideration, then you can choose a suitable asset allocation model.

Ajit Kumar, CSO, KFintech, said “Level II NPS accounts have low administration costs and are easy to access, and professionals invest all funds according to approved guidelines and it’s a hassle-free process. not complicated for you. One can make annual, semi-annual, quarterly or monthly deposits as well as increase or decrease the contribution and deposit funds into tier II accounts via check, cash or draft. “

Necessary document: A PRAN card is the only requirement to open a Level II NPS account as you submitted KYC documents while opening a Tier I account. You must have a completed registration form, proof of identity, by proof of address and proof of age.

Investment required: Level II NPS accounts do not require any minimum annual contributions. The minimum initial amount should be 1000 and you don’t need any maximum investment for this account.

Tax savings: Unlike tier I NPS accounts, tier II NPS accounts do not refund taxes because funds are not locked for a specific period of time. However, you can claim tax on a tier II NPS account with a lock-in period, during 2020-21.

Withdrawal procedure: “To withdraw your funds from a Level II NPS account, you must fill in the required details and submit the UOS-S12 withdrawal form along with the relevant documents. The money will be transferred to the subscriber’s account in up to 3 working days. The required annuity deduction is not required for funds in a Level II NPS account. Mr. Kumar said subscribers can withdraw money without paying penalty fees.

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