NPS charges have changed from 1 October 2026, bringing a standardized Point of Presence, or PoP, fee structure across NPS, or National Pension System, and NPS Lite schemes.
For subscribers using a PoP, the structure has two main parts: a one-time onboarding charge and an annual fee linked to the value of the NPS corpus. The annual charge becomes more relevant as the account grows because it is calculated as a percentage rather than a fixed amount.
So, if NPS forms part of a long-term pension plan, it helps to understand not only the percentage being charged but also how that charge grows with the corpus over time.
What changed from 1 October 2026?
The revised structure follows the PFRDA circular issued on 28 August 2026 and applies from 1 October. It replaces the earlier PoP charge framework issued in March and standardizes charges across NPS and NPS Lite schemes.
For applicable PoP-based accounts, the main charges are:
- One-Time Onboarding Charge per New PRAN
- Lower Onboarding Charge for Eligible Fully Digital, Non-Face-to-Face Accounts
- 0.20% Annual Charge on Assets Under Management
- Applicable Taxes Extra
- No Annual PoP Charge for Dormant Accounts
The annual charge is adjusted through the NAV and paid to the PoP quarterly.
How does the one-time onboarding charge work?
The onboarding fee applies when a new Permanent Retirement Account Number, or PRAN, is opened through a PoP.
It is not taken from the account all at once. The Central Recordkeeping Agency recovers it in equal quarterly instalments through cancellation of units until the full amount is collected.
Eligible subscribers completing onboarding through a fully digital, non-face-to-face process can face a lower onboarding charge instead.
This is a one-time charge, so the bigger long-term consideration is the annual AUM-based fee.
How does the 0.20% annual charge grow with your corpus?
The annual PoP fee is 0.20% of the NPS assets under management.
Because it is a percentage, the charge moves in direct proportion to the corpus. If the corpus doubles, the annual charge doubles too.
Over a typical NPS journey, this plays out in three stages:
- Early Career: The corpus is still small, so the annual charge is modest and has little visible effect.
- Mid-Career: Regular contributions and investment growth build the corpus, and the charge rises with it each year.
- Approaching Retirement: The corpus is usually at its largest, so the annual charge is also at its highest in absolute terms.
Applicable taxes are charged in addition to this annual fee.
The percentage looks small, but NPS is designed for long-term retirement accumulation, so the charge is worth factoring in across the full life of the account.
Does every NPS subscriber pay the new PoP charge?
No. The way the NPS account was opened matters.
Subscribers who were onboarded directly through e-NPS and continue contributing through e-NPS or D-Remit are not liable for PoP charges because their accounts are not linked to a PoP.
However, if the account was originally opened through a PoP, switching later to e-NPS or D-Remit for contributions does not automatically remove the applicable PoP charges.
This means two subscribers with similar NPS balances can face different servicing costs depending on their onboarding route.
What happens to dormant accounts?
Dormant accounts do not attract the annual 0.20% PoP charge.
Under the revised framework, an account is considered dormant when there has been no contribution for four consecutive quarters after a contribution was previously made.
This exemption prevents inactive accounts from continuing to accumulate the annual PoP fee during the dormant period.
However, whether or not to contribute should still depend on the retirement goal rather than the aim of avoiding a service charge.
NPS contributions vs PoP charges: What is the difference?
The revised framework keeps minimum contribution amounts low, both at onboarding and for subsequent contributions, so NPS remains accessible to new subscribers.
It helps to keep the two clearly separate:
- Contributions: Money invested in the NPS account, which stays part of the retirement corpus
- PoP Charges: Fees paid to the Point of Presence for onboarding and servicing the account
Contributions build the retirement corpus, while charges are the cost of having a PoP service the account.
This distinction is important because the contribution and the charge serve completely different purposes.
Why does the annual charge matter more than the joining fee?
A one-time onboarding charge has a limited impact on a retirement corpus.
The 0.20% annual charge is different because it continues as the account grows.
Since the charge is calculated on a corpus that keeps growing year after year, the amount paid in the later years of an NPS account can be considerably higher than in the early years, even though the percentage itself never changes.
The fee therefore becomes more noticeable later in the retirement journey.
That does not mean NPS becomes unsuitable because of the charge. It simply means the cost should be included when looking at the account’s overall long-term value.
Should charges decide which NPS option you choose?
Charges are important, but they are only one part of the decision.
Different pension schemes within NPS can vary in their equity exposure, debt allocation and investment approach. The suitable option should therefore match the subscriber’s retirement timeline and risk level.
When comparing NPS choices, consider:
- Years Remaining Until Retirement
- Equity and Debt Allocation
- Risk Level
- Applicable PoP and Other Charges
- Contribution Route
- Retirement Corpus Required
- Level of Portfolio Management Preferred
A slightly lower cost does not compensate for an investment allocation that does not suit the retirement goal.
What should existing NPS subscribers check?
A quick review of four points shows how the revised structure affects an existing account:
- Onboarding Route: If the account was created directly through e-NPS, the PoP fee structure may not apply. If it was opened through a bank or another registered PoP, the revised charges can apply.
- Contribution Channel: Moving contributions to e-NPS or D-Remit later does not remove PoP charges for an account originally opened through a PoP.
- Current Corpus: Multiplying the account value by 0.20% gives a simple estimate of the annual PoP charge before taxes.
- Account Status: An account with no contributions for four consecutive quarters is treated as dormant and does not attract the annual PoP charge.
Seeing the charge as an actual amount on your own corpus makes its impact far easier to understand than the percentage alone.
The October change makes NPS costs easier to read
From 1 October 2026, the PoP charge structure is more standardised across NPS and NPS Lite schemes.
For applicable PoP-based accounts, the main costs are a one-time onboarding charge and a 0.20% annual fee on AUM. Eligible digital onboarding can lower the initial charge, while directly onboarded e-NPS subscribers contributing through e-NPS or D-Remit are outside the PoP charge structure.
The one-time joining fee is easy to understand. The 0.20% annual charge deserves more attention because its value rises with the retirement corpus.
Knowing that cost makes it easier to understand what is being deducted and factor it into long-term retirement planning.
This content is provided for informational purposes only and is not a substitute for professional advice. AFP editorial staff were not involved in the creation of this content.
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