Top Benefits of Paying for NPS with Credit Cards

The National Pension Scheme (NPS), a long-term retirement savings scheme, was introduced in 2004 to empower employees to take charge of their future. Initially, it was exclusive to government employees, but in 2009, it was extended to all Indian citizens aged 18 to 60. Are you also looking to secure your future and retirement by contributing towards the National Pension Scheme? There are various ways to make your payment, and one smart way is to make an NPS payment through your credit card. This not only offers convenience and timely payments but also puts you in the driver’s seat of your financial planning.

What is NPS?

The National Pension Scheme is a long-term retirement savings scheme initiated by the Government of India. It is a scheme where the contributor invests a certain amount throughout the service period. Once you reach maturity, at 60 years of age, you can withdraw 80% of the corpus, and the rest 20% will go towards purchasing an annuity. Additionally, under 80C, you can avail of a tax deduction of 1.5 lacs and an additional benefit of ₹50,000 under 80 CCD.

There are two types of NPS accounts:

Tier-I

This account is primarily a retirement savings account, a long-term investment. This qualifies for tax deduction and does not permit withdrawals.

Tier-II

You can open this type of account voluntarily only if you have a Tier-I account. It has flexible withdrawal and exit rules and does not qualify for any tax exemptions.

Advantages of NPS Payment Through Credit Card

When you use a credit card to make an NPS payment, you can enjoy the ease and convenience of this payment method, alongside more benefits such as:

1. Improve your credit Score

Credit cards ensure timely payments, which help improve your creditworthiness. In order to build a credit history, you need to stay on track with your timely contributions.

Also read: How To Use Your OneCard to Build Your Credit Score

2. Flexibility

If you run short on funds or want to take advantage of tax deductions at the end of the year, a credit card can be your financial ally. Credit cards offer an auto-pay feature, ensuring you stay on track with your payment or contribution schedule. This flexibility ensures financial planning is easier and more manageable.

3. Secure Transactions

Credit cards come with robust two-factor authentication and safety features, ensuring the utmost security for your investment details. They are designed to ensure that your investment is being made in the most secure way possible.

4. Rewards and Cashback

Investing in NPS through credit cards can increase your credit card usage, allowing you to earn rewards and cashback. For example, you can unlock 5X rewards for the top two categories with One Credit Card. Additionally, this can be a great way to maximize the benefits of your credit card usage while securing your future with NPS.

Procedure how to make an NPS payment using a credit card:

1. Visit the NPS portal and log in with your credentials. If you are a first-time user, complete the registration process.

2. Navigate to the payment or contribution section on the NPS portal.

3. Input the desired contribution amount with other necessary information

4. Choose credit card as your payment mode and enter all the details. Ensure and verify all the details before proceeding with the payment.

5. The payment gateway will redirect you to authorise the payment using the One-Time Password or any other authentication provided by the credit card issuer.

6. Once you complete the transaction, you will receive an acknowledgment, which will serve as a record of your NPS investment.

7. Lastly, monitoring your credit card statements is one way to keep track of your NPS investment. This will help you stay on top of your contributions and ensure you’re on track with your retirement savings goals.

Investing in the National Pension Scheme is a financial step towards securing your future. To conclude, NPS payments through credit cards can be a great option for maintaining a consistent contribution even if you do not have enough funds. Understand the benefits mentioned above for making an NPS payment using a credit card. With every contribution towards NPS, you can secure the second innings of your life.