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How to open NPS Tier 2 account

In this blog post, we explain the procedure for opening the NPS Tier 2 account for existing NPS subscribers i.e. those who already have a Tier 1 account. We discuss both the online and offline methods for doing this. Unless otherwise stated, the contents of this post are relevant to the All Citizens Model.

In case you are not an existing subscriber, then you cannot open a Tier 2 account stand-alone. Only Tier 1 account holders can open a Tier 2 account.  For new joiners, we have explained the procedure for applying for Tier 1 and Tier 2 accounts together, in great detail in the following blog posts: How to open your NPS account: A broad overviewHow to open NPS account online and How to fill the NPS account opening form (for physical application).

NPS Tier 2 account

The NPS Tier 2 account is not a retirement product. It is a wealth-building product just like mutual funds. Opening an NPS Tier 2 account is optional. It is possible to be in the NPS system and have only a Tier 1 account, which is the retirement account.

NPS Tier 2 account allows investors to access the same investment options that are available under the NPS Tier 1 account but with much greater flexibility. For instance, there are no restrictions on withdrawal from Tier 2 account, no annuity purchase requirement at the time of exit and also no minimum balance requirements. However, at the same time, there are no tax exemptions for investing in the Tier 2 account.

Once a Tier 2 account is opened it can be operated completely independently of the Tier 1 account – a subscriber can have different investment pattern, different nominees and a different bank account linked to it. 

NPS Tier 2 account Eligibility 

All residents of India between 18-65years of age are eligible to open a Tier 2 account if they have an NPS Tier 1 account. This can be an existing Tier 1 account or you can submit a joint application for Tier 1 and Tier 2 account at the same time. Also, if you close your Tier 1 account, then the Tier 2 account will also be closed automatically.

NRIs are not eligible for opening Tier 2 account even though they can open the Tier 1 account. OCI (Overseas Citizens of India) and PIO (Person of Indian Origin) cardholders and HUFs are not eligible for opening any of the NPS accounts - Tier 1 or Tier 2.

PAN card is necessary for opening NPS Tier 2 account, unlike Tier 1 account, where it is optional. 

How to open NPS Tier 2 account online

You can open NPS Tier 2 online through the eNPS portal offered by both the CRAs- NSDL and Karvy. We provide a step-by-step guide for opening your NPS Tier 2 account easily below. Please do note that this procedure assumes that you already have a PRAN and active Tier 1 account. If you are a new joiner, looking to open an NPS Tier 1 + Tier 2 account, then you should visit our blog post: How to open NPS account online

Steps for opening NPS Tier 2 account

Step 1: Visit eNPS portal

Visit the eNPS portal and select the “Activate Tier 2 account” option.

Step 2: Authentication of PRAN

You will be asked to provide your PAN, PRAN and DOB. To complete authentication, an OTP will be sent to your registered mobile number which you need to end into the portal.

Step 3: Provide Additional details needed for Tier 2 account

All the personal details are already available with the CRA from the original application, Hence, while opening Tier 2 account, you only need to provide those details which can be different between Tier 1 and Tier 2 account. These are investment options, nomination details and details of the bank account that you would like to link to the Tier 2 account.

Step 4: Upload supporting documents

These supporting documents are PAN card, PRAN card and cancelled bank cheque. You need to be careful about format and size requirements. We specify these in the CRA sections.

Step 5: Make the first contribution payment

In the next step, you are routed to the Payment Gateway to make the first payment via debit card, credit card or Net Banking. The minimum contribution is Rs 1000.

Step 6: Mail application to CRA

The last step is to take a print out of the form and mail it along with a copy of PAN card, PRAN card and cancelled cheque to the CRA mailing address.  This should be sent within 30 days from the date of activation of Tier II account or else the PRAN (Tier II) will be 'frozen' temporarily. 

NSDL NPS Tier 2 account opening details

  • Visit the NSDL eNPS portal. Here you can click on the ‘National Pension System’ button and then select the ‘Tier II Activation’ option.
Screenshot of NSDL eNPS portal for Tier 2 account activation
  • On the next screen, you need to fill the authentication information.
Screenshot of the Tier 2 Activation screen on the NSDL eNPS portal
  • To complete the application, the following documents/information will be required and it is useful to keep them handy:
  1. Scanned copy of PAN (in .jpeg, .jpg or .pdf format with size between 4KB and 2MB)
  2. Scanned copy of PRAN (in .jpeg, .jpg or .pdf format with size between 4KB and 2MB
  3. Scanned copy of cancelled cheque (in .jpeg, .jpg or .pdf format with size between 4KB and 2MB)
  4. Bank account number (in which you have a savings or current account that you wish to link with your NPS Account.)
  5. Internet banking credentials
  • The first contribution has to be made together with the application. It can be made through debit card/credit card or net banking of any of the banks available on the two payment gateways: Bill Desk and SBI ePay.
  • Finally, a physical copy of the form  (with supporting docs ) needs to be mailed to the following address:
Central Recordkeeping Agency (eNPS)
NSDL e-Governance Infrastructure Limited,
1st Floor, Times Tower,
Kamala Mills Compound, Senapati Bapat Marg,
Lower Parel, Mumbai - 400 013

Karvy NPS Tier 2 account opening details

  • Visit the Karvy eNPS portal. Here you can click on the ‘Tier 2 Activation’ button
Screenshot of Karvy eNPS portal for Tier 2 account activation
  • On the next screen, you need to fill the authentication information
Screenshot of the Tier 2 Activation screen on the Karvy eNPS portal
  • To complete the application, the following documents/information will be required and it is useful to keep them handy:
  1. Scanned copy of PAN (in .jpeg, .jpg or .pdf format with size between 4KB and 1MB)
  2. Scanned copy of PRAN (in .jpeg, .jpg or .pdf format with size between 4KB and 1MB)
  3. Scanned copy of the cancelled cheque or Bank Passbook. This is the bank account that will be linked to your NPS account – Permissible size of document upload is 4KB – 2MB.
  4. Bank account number (in which you have a savings or current account that you wish to link with your NPS Account.)
  5. Internet banking credentials
  • The first contribution has to be made together with the application. It can be made through debit card/credit card or net banking of any of the banks available on the two payment gateways: Bill Desk and SBI ePay.
  • Finally, a physical copy of the form  (with supporting docs ) needs to be mailed to the following address:
Karvy Fintech Private Limited,
4th Floor, Karvy Selenium Tower B, Plot Nos. 31 & 32
Financial District, Nanakramguda, Serilingampally Mandal
Hyderabad - 500032

How to open NPS Tier 2 account offline

To open the Tier 2 account offline, you need to submit “Annexure S10  - Activation Form for Tier 2 account” along with supporting documents and the first contribution amount at a convenient POP. Do note that this procedure is applicable for somebody who already has a PRAN and active Tier 1 account. If you are a new joiner, looking to open an NPS Tier 1 plus Tier 2 account, then you should visit our post: How to fill the NPS account opening form.

Locating a convenient POP

Around 85 major financial institutions have been registered as POPs. This number is subject to additions and deletions. You can find the latest list of POPs  by using these tools on the CRA website:

Where to get Annexure S10 - Activation Form for Tier 2 account

Annexure S10 can be easily downloaded from the CRA websites, using the following links:
Shown below is a screenshot of Annexure S10 from Karvy. The form may be updated from time to time so your downloaded version may look different from the screenshot. 

Screenshot of Annexure S10 for opening NPS Tier 2 account

If you do not have online access to the Tier 2 activation form, you can also collect it from a convenient POP-SP branch.

How to fill Annexure S10

Annexure S10 is a smaller form compared to the form that you would have originally filled to open your Tier 1 account (CSRF or Common Subscriber Registration Form). This is because all the personal details are now already available with the CRA and you only need to fill in those details which can be different between the Tier 1 and Tier 2 accounts. These are the following:

Bank Details

You can have a different bank account linked to your Tier 2 account. This is the bank account to your NPS funds will be transferred in case you apply for withdrawal (For more details, visit the NPS withdrawal rules post). You will notice that in the bank details section you have to fill some information like Bank MICR code and IFS code which might seem unfamiliar. However, these details can be easily figured out from your bank check. You can also opt to have the same bank account as Tier 1 account.

Subscriber nomination details

In this section, you need to fill details of your selected nominees, to whom the outstanding pension wealth is payable in case of demise before withdrawal. You can fill the details of up to 3 nominees and the percentage share that you wish to allow each one of them. You can also opt to have the same nomination pattern as Tier 1 account.

Some hygiene points: Percentage share value for all the nominees must be integers. Sum of percentage share across all the nominees must be equal to 100. If the sum of percentage is not equal to 100, the entire nomination will be rejected

Investment details

In this section, you need to specify how you would like your money to be invested i.e. whether you want to go for the Auto-choice or Active-choice options, the asset allocation, etc. We have done a detailed post on NPS investment options which you can check to answer these questions. 

It is important to select the Pension Fund Manager in this section. Failing this, the NPS application will be rejected. However, in case you do not fill the rest of the section, your funds will be invested according to Auto-choice LC 50 option.

One important departure from the Tier 1 form is that there is no option for Asset A or Alternatives as this asset class is not available for investment in Tier 2 account.

PAN number

As we mentioned before, it is mandatory to provide PAN to open a Tier 2 account. 

Documents for Tier 2 application

In addition to this form, the applicant will need to submit 2 copies of the following documents ( please also take the originals for verification):
  1. PAN Card
  2. PRAN card 
  3. Cancelled Cheque of the bank account that you want to link to the Tier 2 account. This cancelled cheque should contain the Subscriber Name, Bank Account Number and IFS Code. If the cheque is not preprinted with name, additionally, a copy of the bank passbook or bank certificate containing this information should be submitted. This proof of bank account has to be submitted even if the account you are linking is the same that you have linked to your Tier 1 account.

Submitting the first contribution

The applicant will also need to submit their first Tier 2 contribution. The minimum contribution amount for Tier 2 account is Rs 1000. The payment can be made through cash, cheque or DD. This amount needs to be submitted together with an NCIS (NPS Contribution Instruction Slip). 

Cheque/DD should be drawn in favor of “POP (Name of the POP) Collection Account - NPS Trust” and crossed A/c payee only. Also please quote your 12 digit PRAN allotted by Central Recordkeeping Agency (CRA) on the reverse of the cheque/DD.

We have attached a screenshot of the NCIS slip (from NSDL) here:
Applicants can download the latest copy of NCIS from either of the CRA websites

Conclusion

In this post, we looked at a special case of NPS account opening: How to open NPS Tier 2 account for somebody who already has a Tier 1 account. We looked at both offline and online methods. 


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