PhonePe rolls out NPS account opening with Rs 250 contribution, no fresh KYC

PhonePe on Tuesday said it has launched a facility that allows users to open a National Pension System (NPS) account with an initial contribution of Rs 250, without uploading fresh documents or completing a new KYC process.

Called Tatkal NPS, the service uses existing bank KYC details verified through a one-time password (OTP) to complete the account-opening process digitally.

The facility allows users to select a linked bank account, make the initial contribution through PhonePe UPI and receive a Permanent Retirement Account Number (PRAN). PhonePe has partnered with banks to offer the service and plans to expand its coverage to more banking institutions.


The facility has been developed by the Pension Fund Regulatory and Development Authority (PFRDA).

How to open an NPS account on PhonePe

PhonePe users can access the facility by searching for NPS on the app and selecting the National Pension Scheme option.

They then need to tap ‘Start Pension Account Journey’ and choose their preferred linked bank account.

After verifying the account through an OTP, users can enter their initial contribution, starting at Rs 250, and complete the payment through PhonePe UPI.

The process generates a PRAN, which serves as the identification number for the NPS account.

According to PhonePe, users do not need to upload fresh documents or complete a separate KYC process for this account-opening journey.

Who can use the new NPS facility?

The service could be useful for people who want to begin retirement planning, including young earners and first-time investors. It may also be relevant to gig workers, freelancers and small business owners who may not have access to employer-sponsored retirement schemes.

The Rs 250 starting contribution allows users to begin investing with a relatively small amount. However, the amount accumulated by retirement will depend on the contributions made over time, investment performance and the investment choices of the subscriber.

Opening an account does not, by itself, guarantee a particular retirement corpus. Investors should consider their long-term financial goals before deciding how much to contribute.

What should you know before investing in NPS?

The National Pension System is a retirement savings scheme regulated by PFRDA. It allows subscribers to invest towards building a retirement corpus, subject to the scheme's rules.

Before opening an account, investors should understand the available investment options, market risks, withdrawal conditions and applicable tax rules. The Rs 250 initial contribution is the entry amount offered through PhonePe's new facility; it does not indicate how much an individual will need to save for retirement.

Deep Agrawal, vice-president and head of payments at PhonePe, said the launch was intended to make long-term financial planning more accessible through a digital process.

PhonePe did not disclose the names of its banking partners in the announcement.