National Pension System NPS rule changed. No credit card payment for NPS Tier II account allowed now Latest News: Credit Card payment for NPS Tier II accounts stopped by PFRDA. Read Details

The Pension Fund Regulatory and Development Authority (PFRDA) has decided to stop accepting subscription/contribution payments by using credit cards as a method of payment in the National Pension System (NPS) Tier-II account. The regulator has instructed all Points of Presence (PoPs) to immediately stop accepting credit cards for payments to NPS Tier II accounts.

In a circular dated August 3, 2022, the PFRDA said: “The Authority has decided to discontinue the payment of subscriptions/contributions by credit card as a means of payment on NPS’ Tier-II account. Therefore, all PoPs are advised to stop accepting credit card as a method of payment for NPS’ Tier-II account with immediate effect.”

The regulator said it has made the decision to stop the use of credit cards on NPS Tier-II accounts in the exercise of the powers conferred under section 14 of the Pension Fund Regulatory and Development Authority Act 2013 “to protect the interests protect and regulate, promote and ensure the orderly growth of the national pension system and pension schemes to which the law applies.”

NPS was the only savings instrument that allowed account holders to invest with their credit card via the eNPS portal. While the credit card payment facility is still available for the NPS Tier-I account, your credit card will not allow you to contribute to the NPS Tier-II account.

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The use of credit cards for payments to investment funds such as mutual funds or stocks, etc. is generally not encouraged due to fears of over-leveraging high-yield money. Credit card users must pay 0.60% (excluding GST) as a payment gateway fee for contributing to NPS with a credit card through internet banking.

NPS Tier II account is a voluntary account that a subscriber can open if he/she has an NPS Tier I account. The Tier-II account has flexible withdrawal and exit rules. Also, contributions to the NPS Tier II account are not eligible for tax exemptions.

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