NPS stops credit card payments in Tier-2 accounts: All you need to know
The new rule is applicable immediately, an official PFRDA notification read.
The Pension Fund Regulatory and Development Authority (PFRDA) has announced-- through an official notification dated August 3 -- that it has decided to stop payment through credit card towards subscriptions/contributions in the Tier-2 account of National Pension System (NPS) with immediate effect.
“Accordingly, all Points of Presence (PoPs) are advised to stop the acceptance credit card as a mode of payment for the Tier-2 account of NPS,” the notification read.
The announcement means that credit card payment will continue only for Tier-1 account of NPS. Meanwhile, here are some features of a Tier-2 account:
(1.) The account is voluntary and a Tier-1 account is required to open it. However, Tier-2 account holders are not eligible to claim income tax exemptions done in the account.
(2.) The minimum amount required to open a Tier-2 account is ₹1,000. Once activated, the account holder can make contributions to it in multiples of ₹250 without any upper limit.
(3.) Tier-2 has more flexible exit and withdrawal rules than Tier-1. This means that you can change your pension fund and investment options. If you want, you can also change the pension scheme or fund manager.
(4.) Subscribers can operate it from anywhere, even if they relocate to a new city or change jobs.
(5.) The NPS consistently monitors Tier-2 accounts, while the PFRDA regulates it. Also, fund managers undergo regular performance review.