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.

Published on: Aug 4, 2022, 14:08:22 IST

By HT News Desk, New Delhi

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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.

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HT News Desk
Follow the latest breaking news, major developments and agenda-setting stories from India and around the world with the newsdesk at Hindustan Times. Operating round the clock, the desk brings together experienced editors, reporters and correspondents to deliver fast, accurate and contextual reporting across subjects that influence public policy, governance, business, society and international affairs. The HT News Desk covers politics, elections, government policies, the economy, business and markets, science and technology, the environment, law and order, infrastructure, education, climate issues and geopolitics, while closely tracking developments across states, institutions and global capitals. The team also leads coverage of major breaking news events, policy announcements, court proceedings, natural disasters, public emergencies and significant international developments. Reports published by the newsdesk are based on information gathered from reporters on the ground, official statements, government agencies, court records, regulatory filings, recognised institutions and other authoritative sources. Stories undergo editorial scrutiny and verification processes to ensure accuracy, fairness and relevance, and are updated as events evolve and additional information becomes available. Whether covering a key political decision in New Delhi, an economic policy shift affecting millions, a landmark court ruling or a major global event, the HT News Desk aims to provide readers with reliable, fact-based journalism that delivers not only the latest developments but also the context and analysis needed to understand their wider implications.Read More

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