Most people think Nps charges are too a low compared to other financial products.

As a reuslt of they are enrolling for this pension product.

But You should not only look into fund managing charges.

In addition, You have to look total cost for enrolling for this scheme.

We all know that NPS is one of the hot choices for many to invest for their retirement and also to save on tax.

In addition It is up to you  to decide  whether  to invest in it or not.

However, in this post, let me share the charges of investing in Nps account (especially if you are investing through PoPs).

Because many people think that PoP charges are also cheap like NPS!!

NPS charges- all You need to know…

You may have  noticed that if you are trying to open this nps  account and managing it through POPs,

then the cost is much higher  from the beginning itself.

In addition, The  account opening charges varies from Rs.200-Rs.400.

However, in  case of CRAs, it is  just around Rs.40.

Same way, the biggest game changer in the case of cost between POPs and CRAs is the charges for each contribution.

In  case of CRAs, it is meager (Rs.3.36 to Rs.3.75).

But in  case of POPs, it is 0.5% for each contribution (0.2% in  case of eNPS) subject to the maximum and minimum limit mentioned above.

So, This seems to be the costly and big differentiator when it comes to investing in NPS through POPS and CRA.

Along with that, both POPS AND CRAS charge annual charges (in  case of POPs, it is called PERSISTENCY charges).

Here, the charges of POPs are based on the yearly contribution.

However, in  case of CRAs, it is fixed without considering how much you charge.

Hence, what I am trying to tell you highlight here is that these charges many people ignore or do not share and just mention the  fund management charges (shared above).

As per the UTI AMC FAQs on NPS, the total charges of NPS are around 0.21% but not just 0.03% to 0.09% fund management charges.

This seems to be equal or in fact more if you compare the available few Index Mutual Funds or ETFs.

But the only differentiator is, in the case of NPS, your equity and debt components are combined.

However, if you do it on your own, then you have to choose the different products.

In case  you or your employer opened your NPS account through POPs, then it will cost you more than having an account with CRAs.

What is NPS retirement adviser fee?…

“Retirement adviser” means any person being an individual who desires to engage in the activity of providing advice on National Pension System or other pension scheme regulated by Authority to prospects/subscribers or other persons or group of persons and is registered as such under these regulations.

In addition this Retirement Adviser can charge three type of fees from the subscribers to whom he/she has given retirement advise as per regulations and these fees are explained below.

a) Onboarding charges – Rs.200 /- (Max.) on completion of onboarding of subscriber and generation of Permanant Retirement Account Number PRAN.

b) In addition, Subsequent transaction charges – minimum  of Rs.20 per transaction and maximum Rs.100/- per year.

c)  And Advisory fee  of  – 0.02% of AUM subject to a minimum of Rs. 100/-, and a maximum of Rs. 1000/- per annum, for providing advice to the nps subscribers.

These are the upfront charges of Retirement Advisers.

However, if they have an associated with POPs, then you have to bear the two costs.

One is the cost of a Retirement Adviser and the other cost is the POPs.

Hence, it it is allways better to check the cost before taking advice from them.

In addition, You need to check whether the adviser is associated with POPs.

Or They are advising to open enps account directly.

In fact, it is clearly mentioned that RAs have to inform them about their tie-ups with the PoPs to the prospective subscribers.

To become  a retirement adviser, one must  be a graduate with NISM certification.

However, this certification requirement is exempted for SEBI Registered Investment Advisers (RIA’s) .

Hence, your SEBI RIA  may claim to be not associated with any selling of securities (which comes under SEBI).

But  may act like middlemen for your NPS.

One more undisclosed earning to them MAY be that if such reasearch analysts associateed with certain POPs, then they may give commission from some % of POPs charges (as there are no such rules from PFRDA that one can’t pass the benefit to reasearch analysits).

After Considering all these above facts,  that having an account with CRAs is a far better option for you than POPs.

I am not a fan of NPS but if someone is willing to save some additional tax.

Then you may opt for a yearly Rs.50,000 contribution or if your employer is contributing.

Otherwise, better to avoid such products.

However, do not fall for the trap by listening to the words that cheapest pension product or tax efficient product etc.

And you should have own plan and take decission wisely.