NPS, also known as the National Pension System, is a voluntary retirement plan that assists subscribers in building savings for retirement and receiving a steady pension when they no longer have an income.
Once you have opened an NPS account, you can contribute regularly to accumulate wealth through compounding interest. With the growing popularity of Credit Cards as a payment option, you may have questions on how to make NPS payments through Credit Cards. This blog will help you learn how to make these payments effectively with a Credit Card.
What is an NPS Scheme - An Overview
The NPS is a long-term retirement planning scheme regulated by PFRDA, allowing individuals to contribute small portions of their income to build a secure retirement corpus.
It was started in 2004, initially for government employees, and later it was opened to all Indian citizens aged 18 to 70 in 2009, including private and public sector workers. The scheme encourages systematic savings from a young age, allowing subscribers to withdraw up to 60% of their corpus at retirement and invest the remaining 40% in an annuity for a lifelong pension. Moreover, you also get attractive tax benefits on NPS contributions under the Income Tax Act.
Learn more about What is NPS?
Can Investors Use a Credit Card for NPS Payment?
Investors can use their Credit Cards to make NPS payments, but this option is available only for Tier I accounts, not Tier II. Managed by ICICI Bank and other ASPs, NPS allows various payment methods, with transaction charges applicable when paying contributions via a Credit Card for added convenience.
How to Use a Credit Card for NPS Payment?
With ICICI Bank, you can easily make your NPS contributions using a Credit Card. You can pay your monthly or annual contributions through ICICI Bank’s digital platforms without any hassle. You can choose to pay via the iMobile App or internet banking.
Through ICICI Bank Net Banking
Open/ Log in to the ICICI Bank Net Banking.
Once logged in, click on the "Investment and Insurance" on the top drawer option/section.
Select " NPS" and select your NPS Scheme account & Click to view National Pension System Scheme Portfolio & Contribution.
Click on “Make Contribution”
Select Tier I
Select Credit Card
Enter: Amount & Schedule payment as One time or Recurring and confirm Payment
The transaction will be processed in 2 working days and will reflect in the NPS account in 4 working days
Through iMobile App
Paying through the ICICI Bank website is the quickest, easiest, and most reliable way to make your NPS payment. Just follow these simple steps to complete the payment:
Open/ Log in to the ICICI Bank iMobile app.
Once logged in, click on the "Invest" on the top app drawer option/section.
Select ‘NPS’ to view the NPS Portfolio & Contribution.
Click on “Make Contribution”
Select Tier I
Select Credit Card
Enter: Amount & Schedule payment as One time or Recurring and confirm Payment
The transaction will be processed in 2 working days and will reflect in the NPS account in 4 working days
Important: Ensure your first NPS contribution online within 45 days of receiving your PRAN (Permanent Retirement Account Number) to avoid account freezing.
After completing the above steps, the contribution will be reflected in the NPS account after 2 days.
Pros and Cons of Using a Credit Card for NPS Payment
Let’s look at the pros and cons of using a credit card for NPS payment:
Pros:
- Contributing to NPS via credit card increases the card’s usage, making the subscriber eligible for greater cashback and
- When running short of funds, account holders can continue their NPS contributions without paying the cost upfront.
- Higher NPS contributions using credit cards provide maximum tax deductions to reduce tax
Cons:
- Not paying the credit card bill on time makes the contribution costlier due to interest
Using a credit card for NPS payment is perfect for maintaining consistency in NPS contributions, even during financial shortfalls. However, repaying credit card bills on time is essential to avoid high interest rates and late payment charges. Each NPS contribution secures financial stability for the second innings of life.
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