The State Bank of India (SBI) has launched an auto-debit feature for customers with NPS accounts. The bank will automatically deduct a fixed sum per month and transfer it to the customer’s NPS account. Customers can register for auto-debit on the bank’s website onlinesbi.com.
The new feature fixes a major lacuna in the NPS infrastructure which previously only allowed manual contributions through bank branch or online via debit card/net banking. This change is relevant for NPS All Citizens subscribers. NPS Government and NPS Corporate subscribers would have had employers deducting their salaries towards contributions, making auto-debit unnecessary.
The NPS or National Pension System is a retirement savings vehicle that matures at the age of 60. It is compulsory for government employees and also available to private sector workers or the self-employed. Contributions to it are eligible for tax deduction up to Rs 1.5 lakh under Section 80 C and Rs 50,000 under Section 80 CCD (1B). NPS funds can be invested in equities, government bonds and corporate bonds as per the subscriber’s choice. Subscribers can open accounts and contribute online at enps.nsdl.com or enps.karvy.com. You can read more about the NPS here.