Retirement Planning: Want to set up SIP for your NPS account? Here are the steps to follow

National Pension System (NPS) is a government-backed pension scheme designed to help individuals save for their retirement. NPS offers two investment options: active choice and auto choice.

In the active choice option, investors can allocate their investments among equity, corporate bonds, and government securities as per their preference. The auto choice option automatically allocates assets based on the investor's age. Additionally, NPS provides tax benefits under Section 80C and Section 80CCD(1B) of the Income Tax Act.

Understanding SIP
A Systematic Investment Plan (SIP) involves investing a fixed amount of money at regular intervals in mutual funds or other investment instruments.
SIPs promote disciplined investing, benefit through rupee cost averaging, and help investors achieve long-term financial goals.

Setting up a SIP in NPS
To set up a SIP in NPS, follow these steps:

• Log in to your NPS account: Visit the official website of your NPS service provider and log in.
• Navigate to the investment section: Look for the 'Contribution' or 'Investment' section in the menu and click on it.
• Select systematic investment plan: Choose the 'Systematic Investment Plan' option and decide the frequency (monthly, quarterly, or half-yearly) and the investment amount.
• Choose your scheme: Select the scheme(s) you wish to invest in. You can opt for a single scheme or multiple schemes with different asset allocations.
• Review and confirm: Review your selections and confirm the details.
• Provide necessary information: Enter your bank account information, date of the first instalment, and complete the KYC (Know Your Customer) process if not done already.
• Make the first payment: Make the first instalment payment through net banking, debit card, or other available payment options.

Once these steps are completed, your SIP in NPS will be set up, and the chosen amount will be debited from your bank account at the selected frequency. You can track and modify your investments as needed.

How to pay NPS SIP online?
To pay for NPS SIP online, log in to your NPS account, select the SIP option, choose the scheme(s), and provide necessary details such as bank account information and the first instalment date. Review and confirm the details, proceed to the payment page, and choose a payment mode. Complete the payment process or set up an auto-debit facility with your bank.

Should you start SIP in NPS?
Starting a SIP in NPS is beneficial for those looking to save for retirement. NPS is a government-backed pension scheme that offers tax benefits and a long-term focus. SIPs foster disciplined investing and rupee cost averaging, aiding in achieving long-term financial goals.

Setting up a SIP in NPS is an effective way to save for retirement, making it an ideal retirement planning tool.