NPS Account: Nomination, joint holding and other basics that National Pension System beneficiary must know

NPS Account: In a bid to provide social security to the senior citizens, the Central Government introduced the National Pension System (NPS) system in 2004. Earlier, the NPS Scheme was available to the salaried individuals only but later on it was made available to all types of investors. Though it's been more than 15 years since its inception, there are still some facts like nomination, joint account holder, etc. that people need to know before opening the NPS account.

NPS account nomination rule

Speaking on the joint holding and nomination rules in the NPS Scheme Mumbai-based tax and investment expert Balwant Jain associated with ApnaPaisa said, "The NPS account can only be opened in a single name, however, the rules allow you to appoint a maximum of three nominees for your NPS account. The nominee can be appointed at the time of opening the NPS account. Since it is a prudent practice to have a nominee for all your investments, you should appoint a nominee for your NPS account as well." Jain said that the nominee can be a major or a minor but in case of minor being appointed as nominee, the NPS account holders need to furnish details of the guardian with date of birth of the minor.

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"While nominating more than one nominee, you need to specify shares of each nominee in percentage terms. Please ensure that share is not mentioned in fraction and sum of all the nominees add to 100 per cent," said Jain.

NPS account contribution limit

On whether there is any cap on annual investment in NPS account as in the cse of Public Provident fund (PPF); SEBI registered tax and investment expert Manikaran Singhal said, "Unlike a PPF account where you cannot deposit more than Rs 1.50 lakh in a single PPF account in a year, there is no such cap on annual investment in one's NPS account."