How much is too much NPS contribution using credit card

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Sudarshan61

As we know HDFC/Axis and other banks do cancel the credit card for misuse using NPS.

But I want to know how much is too much investment into NPS using credit card (Please not I am talking about genuine investment and not money rotation ).

I personally have been doing close to 70K a year without any issue so far.

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50K is okay every year

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raman12 wrote:

50K is okay every year

On what basis? Just NPS1 limit ?
Again I am talking of genuine investment here .

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There is a 0.75% charge right @Sudarshan61
How are you paying it, any loop please DM bro

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Sudarshan61 wrote:

On what basis? Just NPS1 limit ?
Again I am talking of genuine investment here .

Cut PPF, take NPS, term life and ELSS only for 80C, proportion depends on your risk.
If you are conservative and want long term savings NPS
If you are aggressive and looking for a medium term ELSS

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decideaim wrote:

Cut PPF, take NPS, term life and ELSS only for 80C, proportion depends on your risk.
If you are conservative and want long term savings NPS
If you are aggressive and looking for a medium term ELSS

Off topic.

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I don’t think there’s any loop. It cc reward points/cashback only. I used axis ace which gives 2% cashback for nps. So effectively saving 1% after approx 1% charge. I used to do 10k per month for nps1 only and obviously 50k annually. For nps2, I never used credit card.

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SG_Magical wrote:

I don’t think there’s any loop. It cc reward points/cashback only. I used axis ace which gives 2% cashback for nps. So effectively saving 1% after approx 1% charge. I used to do 10k per month for nps1 only and obviously 50k annually. For nps2, I never used credit card.

Thanks bro, will explore that option if possible, by loop I meant, some savings without incurring charges, this should do it.

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Sudarshan61 wrote:

On what basis? Just NPS1 limit ?
Again I am talking of genuine investment here .

Yes NPS 1
If you are adding remaining to Tier2, i don’t think any problem upto 50k in T2 because CC company doesn’t know you are adding to T1 or T2.
But don’t do all 1lac at once wink

If people start abusing this, definitely HDFC or any other company will start imposing restrictions

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raman12 wrote:

Yes NPS 1
If you are adding remaining to Tier2, i don’t think any problem upto 50k in T2 because CC company doesn’t know you are adding to T1 or T2.
But don’t do all 1lac at once wink

If people start abusing this, definitely HDFC or any other company will start imposing restrictions

Thats true.
Card companies do cancel the credit card on misuse.

I am basically after that threshold where in this companies start looking it as misuse smile

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Sudarshan61 wrote:

Thats true.
Card companies do cancel the credit card on misuse.

I am basically after that threshold where in this companies start looking it as misuse smile

If you are damn sure of spending 70k, do it on different card to be safe always

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I do transfer 25k at a time (based on spend based offers on card) to my nps tier 2 (later convert 50k to tier 1 for tax purposes) account totalling to roughly 1 lakh a year (spread accross 2-3 cards based on offers). Never had any issue from last 3 years.

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I recently opened my nps account in SBI via netbanking. I’m not clear on the next set of instructions. Do I need to submit the form with photograph and other KYC docs to NSDL, Mumbai office?
This is written in the form that I downloaded after registration:
The form should be sent within 30 days from the date of registration at the following address or else the PRAN will be ‘frozen’ temporarily.
Central Recordkeeping Agency
NSDL e-Governance Infrastructure Limited, 1st Floor, Times Tower,
Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013
The envelope containing the form and other supporting documents must clearly be labelled as “NPS Registration form – SBI Internet Banking”. Please Note: The form does not require any verification by SBI branch and needs to be directly sent to NSDL office as above.

Any guidance will be helpful.

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22sumit wrote:

I recently opened my nps account in SBI via netbanking. I’m not clear on the next set of instructions. Do I need to submit the form with photograph and other KYC docs to NSDL, Mumbai office?
This is written in the form that I downloaded after registration:
The form should be sent within 30 days from the date of registration at the following address or else the PRAN will be ‘frozen’ temporarily.
Central Recordkeeping Agency
NSDL e-Governance Infrastructure Limited, 1st Floor, Times Tower,
Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013
The envelope containing the form and other supporting documents must clearly be labelled as “NPS Registration form – SBI Internet Banking”. Please Note: The form does not require any verification by SBI branch and needs to be directly sent to NSDL office as above.

Any guidance will be helpful.

u should be getting eKYC option, must be there check for it; if u do eKYC no need of sending physical form

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caks2006407 wrote:

u should be getting eKYC option, must be there check for it; if u do eKYC no need of sending physical form

My sbi bank has got the KYC done already, won’t that work? Holding same bank for savings, ppf and home loan

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decideaim wrote:

Cut PPF, take NPS, term life and ELSS only for 80C, proportion depends on your risk.
If you are conservative and want long term savings NPS
If you are aggressive and looking for a medium term ELSS

Cut only thing which is eee?yes 7.1% is very very low but still eee.

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kukdookoo wrote:

Cut only thing which is eee?yes 7.1% is very very low but still eee.

You E in the PPF will be useless if it takes another 1 or 2 percentage cut, highly likely as fixed deposits now fetching old savings deposit interest, government has already shown intent but somehow the order was overturned, so my suggestion personally is decreasing PPF allocation

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decideaim wrote:

You E in the PPF will be useless if it takes another 1 or 2 percentage cut, highly likely as fixed deposits now fetching old savings deposit interest, government has already shown intent but somehow the order was overturned, so my suggestion personally is decreasing PPF allocation

so my suggestion personally is decreasing PPF allocation

this is true for younger generation or who have started ppf recently.

what about senior citizens who invested in ppf for all this time? Should they stick with it?

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decideaim wrote:

Cut PPF, take NPS, term life and ELSS only for 80C, proportion depends on your risk.
If you are conservative and want long term savings NPS
If you are aggressive and looking for a medium term ELSS

Off topic.
However, the claimed “aggressiveness” of ELSS can also be achieved through NS Active choice. On the other hand, ELSS has much higher admin charges. And PPF returns are 100% tax free and risk free. If one has a girl child, then Sukanya Samriddhi is even better.
OP, unless you card is giving cashback higher than the charges or you are using this method to achieve the spending limits, it is not a good option to use Credit card. The banks can always review their internal policies and change their definition of “commercial use”.

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22sumit wrote:

I recently opened my nps account in SBI via netbanking. I’m not clear on the next set of instructions. Do I need to submit the form with photograph and other KYC docs to NSDL, Mumbai office?
This is written in the form that I downloaded after registration:
The form should be sent within 30 days from the date of registration at the following address or else the PRAN will be ‘frozen’ temporarily.
Central Recordkeeping Agency
NSDL e-Governance Infrastructure Limited, 1st Floor, Times Tower,
Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013
The envelope containing the form and other supporting documents must clearly be labelled as “NPS Registration form – SBI Internet Banking”. Please Note: The form does not require any verification by SBI branch and needs to be directly sent to NSDL office as above.

Any guidance will be helpful.

I opened NPS through ICICIDirect about 6 years back. After completing the process, they prepared a prefilled form which I was required to download, sign, attach a photo and physically post to their office. My KYC details available with them was already pre-printed in the form. Got my physical PRAN after a couple of weeks of sending this.
My guess is, NSDL still requires physical signature in the account opening form as most of us do not have a legally valid digital signature. However, many things now work with Adhaar e-sign, but they do not seem to have activated this feature for NPS.

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kukdookoo wrote:

so my suggestion personally is decreasing PPF allocation

this is true for younger generation or who have started ppf recently.

what about senior citizens who invested in ppf for all this time? Should they stick with it?

Yeah for seniors market can’t fetch much, as the investment would be short term, I agree with you that they should stick to what they are doing already.

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panchabhut wrote:

Off topic.
However, the claimed “aggressiveness” of ELSS can also be achieved through NS Active choice. On the other hand, ELSS has much higher admin charges. And PPF returns are 100% tax free and risk free. If one has a girl child, then Sukanya Samriddhi is even better.
OP, unless you card is giving cashback higher than the charges or you are using this method to achieve the spending limits, it is not a good option to use Credit card. The banks can always review their internal policies and change their definition of “commercial use”.

Not using card to achieve spending limit or fee waivers ..
I don’t fall into such traps ..

It’s regular investments. I do upwards 50K + 1L (Min) into NPS every year ..(and I haven’t made a single withdraw yet .so no money rotation as well). Just after experience of users who’s card may have been cancelled or treat such transactions as rotation (need to know the threshold).

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panchabhut wrote:

I opened NPS through ICICIDirect about 6 years back. After completing the process, they prepared a prefilled form which I was required to download, sign, attach a photo and physically post to their office. My KYC details available with them was already pre-printed in the form. Got my physical PRAN after a couple of weeks of sending this.
My guess is, NSDL still requires physical signature in the account opening form as most of us do not have a legally valid digital signature. However, many things now work with Adhaar e-sign, but they does not seem to have activated this feature for NPS.

I did based on e-Aadhaar in 2019, never sent any form, rcvd PRAN in just 1 day
either they stopped this e-Aadhaar or OP not able to find it

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panchabhut wrote:

Off topic.
However, the claimed “aggressiveness” of ELSS can also be achieved through NS Active choice. On the other hand, ELSS has much higher admin charges. And PPF returns are 100% tax free and risk free. If one has a girl child, then Sukanya Samriddhi is even better.
OP, unless you card is giving cashback higher than the charges or you are using this method to achieve the spending limits, it is not a good option to use Credit card. The banks can always review their internal policies and change their definition of “commercial use”.

I can argue that bro, the returns speak for themselves.

In NPS you have to keep the amount forever or only take back a percent of it, so for short term goals you can go for ELSS. ELSS can be continued beyond tenure too, if wanted.

SSY is a very rigid system, and if you want to invest until your retirement it is not even an option to consider.

My sincere apologies to OP for us hijacking the topic

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decideaim wrote:

I can argue that bro, the returns speak for themselves.

In NPS you have to keep the amount forever or only take back a percent of it, so for short term goals you can go for ELSS. ELSS can be continued beyond tenure too, if wanted.

SSY is a very rigid system, and if you want to invest until your retirement it is not even an option to consider.

My sincere apologies to OP for us hijacking the topic

My apologies to OP for being Offtopic.
The comparison reference was between PPF and ELSS.
NPS does not come into comparison as it is in a separate class with special 50K tax rebate exclusive for NPS. So for someone in the 30% tax bracket, invest of 50K gives immediate cashback of 15.6 K in the form of reduced tax. When returns are considered on the basis of the net investment of 34.4K no other investment comes close. However, for investment in NPS above 50K, a more detailed comparison of other available options are necessary.
SSY is linked to the age of the girl child. It has no linkage to retirement age. But most parent would invest at least in part considering the future requirements of their children.

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panchabhut wrote:

My apologies to OP for being Offtopic.
The comparison reference was between PPF and ELSS.
NPS does not come into comparison as it is in a separate class with special 50K tax rebate exclusive for NPS. So for someone in the 30% tax bracket, invest of 50K gives immediate cashback of 15.6 K in the form of reduced tax. When returns are considered on the basis of the net investment of 34.4K no other investment comes close. However, for investment in NPS above 50K, a more detailed comparison of other available options are necessary.
SSY is linked to the age of the girl child. It has no linkage to retirement age.

So between PPF and ELSS, you’d prefer PPF bro, I’m scaling down my PPF investment because of constant downfall of the interest rates.
Age of child in SSY should be less than 10 years but the scheme has a fixed period of 21 years tenure, that’s why I’m calling it rigid.
Edit: The biggest joke is if you want to break SSY for any reason, the interest given is simple savings interest, so all these calculations go into thin air.

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kukdookoo wrote:

so my suggestion personally is decreasing PPF allocation

this is true for younger generation or who have started ppf recently.

what about senior citizens who invested in ppf for all this time? Should they stick with it?

Once the 15 year time frame is achieved, PPF becoming like a saving account, with withdrawal possible any time. For someone who started PPF at their initial work days, this would be the time they are around 40-45 years of age, with other taxable income and no immediate need for money. Returns of PPF is tax free. But if the money is withdrawn and invested elsewhere, the returns would be added to income and increase the tax burden. So it is better to continue with PPF.

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panchabhut wrote:

Once the 15 year time frame is achieved, PPF becoming like a saving account, with withdrawal possible any time. For someone who stated PPF at their initial work days, this would be the time they are around 40-45 years of age, with other taxable income and no immediate need for money. Returns of PPF is tax free. But if the money is withdrawn and invested elsewhere, the returns would be added to income and increase the tax burden. So it is better to continue with PPF.

Bhai you obviously are more knowledgeable in these aspects as compared to me, there is no doubt in that, but my concerns are valid for me, so I’ve put forth my position and stance as an argument, to see if I can do the investment better.

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decideaim wrote:

So between PPF and ELSS, you’d prefer PPF bro, I’m scaling down my PPF investment because of constant downfall of the interest rates.
Age of child in SSY should be less than 10 years but the scheme has a fixed period of 21 years tenure, that’s why I’m calling it rigid.
Edit: The biggest joke is if you want to break SSY for any reason, the interest given is simple savings interest, so all these calculations go into thin air.

SSY – Investment has to be made for a period of 15 years. Maturity is 21 years from the date of first investment. Partial withdrawals, upto 50% of the available balance is allowed for higher education and/or marriage of the girl child after 18 years of age of the child.
It is not a general investment and it is only for parents intending to save for higher education, marriage and other benefits of their girl child.

Missing