NPS account opening: Compare CRA charges deducted from retirement corpus (2024)

Over the years, the National Pension System (NPS) regulator, the Pension Fund and Regulatory Development Authority (PFRDA), has expanded the record-keeping functions from one central record-keeping agency (CRA) to three.

Currently, an individual can open an NPS account with any of the three CRAs - Protean (formerly known as NSDL), CAMS and KFintech. A person is allowed to open only one NPS account.

All CRAs levy three common charges:

a) One-time account opening charges
b) Annual maintenance charges for the NPS account
c) Charges for every transaction

But the amount charged by the three CRAs differ. Though the differences are miniscule, in the long run, they may have an impact on how much corpus is accumulated at the time of maturity.

Also Read: What to do if you are not happy with your NPS account keeper?

Also Read: How NPS account charges are cut from your corpus

Also Read: How to open NPS account online

The charges are not levied/payable upfront in the form of money but are deducted from the units in the account. To explain it further: When an individual makes an investment in the scheme, units are allotted in the NPS account against the contribution amount. This is similar to how mutual fund units or shares are allotted against the investment amount. According to the rules, the CRA debits charges from an NPS account by deducting units held on a quarterly basis.

This means that in every quarter, some units in your NPS account will be deducted for the charges applicable. For example, let us say there are 63 units in your NPS accounts at the start of a quarter. The charges to be deducted are Rs 21, which translates to, say, 4 units. At the end of the quarter, 4 units will be deducted from your account and the unit balance will become 59 units.

Here is how much each CRA charges for opening NPS accounts:

By looking at the table above, it is clear that the charges levied by KFintech are the lowest. Between CAMS and Protean, the charges for certain services are lower in CAMS.

Charges payable for opening NPS account via a PoP
If you open an NPS account by visiting a point-of-presence (PoP), then additional charges are payable. A PoP is the first point of contact for an individual who opts to open an NPS account in the offline way. The functions of PoP include accepting and verifying forms from NPS subscribers, and processing these to open an account.

According to the NPS Trust website, the following charges are levied when opening an account via PoP:
a) Initial subscriber registration charges: Minimum Rs 200 and maximum Rs 400
b) Initial and subsequent contribution transactions: Up to 0.50% of the contribution amount, subject to minimum Rs 30 and maximum Rs 25,000. For non-financial transactions, Rs 30 will be charged.
c) A persistency fee is also levied. This fee is payable to the PoPs with which a subscriber is associated for more than 6 months in a financial year.
d) Processing NPS exit papers or any premature withdrawal from the scheme attracts a charge of 0.125% of the corpus, with minimum of Rs 125 and maximum of Rs 500.
e) In case a PoP subscriber contributes through the eNPS platform, a service charge will be charged at 0.20% of the contribution, subject to minimum of Rs 15 and maximum Rs 10,000.

These charges are exclusive of GST which will be levied at the rate of 18%.

...moreless

...moreless