Last Updated on October 1, 2023 at 9:22 pm
Here is how you can set up an NPS SIP using the new D-Remit deposit facility and get the same-day NAV on national pension scheme contributions. To ease the process of contribution to the National Pension System(NPS), the Pension Fund Regulator(PFRDA) has introduced a new mode of deposit facility called Direct Remittance(D-Remit) starting from October 1, 2020. Circular no. PFRDA/ 2020/ 44/ SUP-CRA/17.
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The D-Remit facility will enable subscribers to set up systematic investment (SIP) through net banking to make periodic contributions to their NPS accounts. D-Remit facility eases the process of making a regular contribution into NPS and helps subscribers optimize the investment returns by providing the benefit of same-day NAV if contributions are received at Trustee Bank before 9:30 am on any bank working day except Saturday, Sunday and Public Holidays.
The contributions received post 9:30 am will be invested into NPS on the next working day, i.e. T+1 day. In the existing model of deposits such as e-NPS or Points of Presence(POP) contributions are invested into NPS after two working days, i.e. T+2 days whereas D-Remit enables subscribers to gain the benefit of same-day NAV by depositing contributions into NPS investments on the same working day, i.e. T day if deposits are made before the cut-off time.
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The existing NPS subscribers under Government/Non-Government/All Citizens model can avail the D-Remit facility at no extra cost by logging into their respective CRA system and creating a Virtual ID linked to their Permanent Retirement Account Number (PRAN). Initially, when the D-Remit facility was introduced the cut-off time to avail same-day NAV was 8:30 AM, however starting from November 12, 2020, the cut-off time has been revised to 9:30 AM.
How to create Virtual ID to avail D-Remit Facility
The Virtual ID creation is a one-time process and once generated the same Virtual ID can be used to deposit contributions into NPS in the future as well. NPS subscribers can create Virtual IDs by accessing their respective Central Record Keeping Agency(CRA) websites.
- NPS subscribers who use NSDL CRA can create Virtual ID by accessing the following link: https://cra-nsdl.com/CRAOnline/VirtualIdCreation.html
- NPS subscribers who use Karvy CRA can create Virtual ID by accessing the following link: https://enps.kfintech.com/dremit/prelogindremit/
During the process of Virtual ID creation, subscribers will be sent an OTP to their registered mobile number as part of the authentication process, and it is mandatory to have a mobile number registered in PRAN in the CRA system. The Virtual ID creation is a one-time activity and will be linked permanently to PRAN for the D-Remit facility. The subscriber needs to provide an online declaration for compliance under the Prevention of Money Laundering Act, 2002 (PMLA) during the Virtual ID creation process. The subscriber will receive an SMS/E-Mail once the Virtual ID is created successfully and authorized.
How to use Virtual ID to transfer funds into NPS account:
After the creation of Virtual ID, subscribers can log in to their net banking account and add the generated Virtual ID as the beneficiary with the IFSC code of their Trustee bank. Once the beneficiary account has been added successfully, subscribers can log in to their net banking and make NEFT/RTGS transfers to their NPS account at any time.
At present, the IMPS mode of transfer is not accepted by Trustee banks for this transaction. The subscribers can make systematic investments(similar to mutual fund SIPs) into NPS by setting up auto-debit standing instructions in net banking. PFRDA suggests that the fund transfer made using the D-Remit transfer facility should have narration “NPS Contribution for D-Remit”.
The minimum amount that can be contributed through D-Remit is Rs.500/- for both Tier-1, Tier-II accounts and there is no additional cost for subscribers to avail the D-Remit facility. As mentioned above funds received on T day until 9:30 AM on any bank working day will be invested into their NPS account on the same day and contributions made after 9:30 AM on T day shall be invested on next bank working day, i.e. T+1 day.
The D-Remit option provides a seamless facility for subscribers to make contributions into their NPS accounts and also helps them to optimize the return on investment by providing them with the benefit of same-day NAV investment.