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How to Change NPS Fund Manager Online on NSDL Website?

Investment

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February 6, 2020

Now you can change NPS fund manager online on NSDL Website. In addition to changing the fund manager, you can also change the investment choice of NPS. i.e Active or Auto choice. You can also switch your allocation between Equity (E), Corporate Bonds (C), and Government Securities (G).

This facility will surely help NPS investors who are planning to change the NPS Fund Manager. The said facility is available for both Tier I and Tier II subscribers.

In this post, we will take a look at the step by step process for changing NPS fund manager online on NSDL website. This includes changes like active to auto, auto to active and allocation changes.

How to make changes to NPS Account Online?

At the time of opening the NPS account, you need to select a type of account & mode of investing – active or auto. You can also select a pension fund manager and decide the percentage in which proportion investment will take place such as equity, corporate or government bonds.

If you have selected an auto mode the investment proportion percentages change based on your age. If you want to manage the investment percentage on your own, you need to switch to active mode. Apart from that if you are not satisfied with fund performance you can also change your pension fund manager.

You can change your pension fund manager once in a year. Allocation of scheme and active/auto choice can be changed two times in a financial year. The change in a fund does not involve any additional taxation or exit load.

There are two methods to make changes (1) Offline method (2) Online method

Also Read – NPS Online Payment – How to make NPS Online Payment?

How to make change in NPS Account Offline?

You need to download application form for the scheme preference changes from NPS website. This form is also known as UOS-S3/CS-S3.
The form includes details such as PRAN number, name of subscriber, PFM name, investment option, asset allocation etc.
The POP will provide acknowledge number receipt to you.
Separate forms to be submitted for Tier I and Tier II

How to change NPS Fund Manager (PFM) Online?

Login to CRA system (https://cra-nsdl.com/CRA/) with user ID and password or IPIN for NPS. You can also make use of NPS mobile app which is available for Google Play or IOS store. If you don’t have IPIN you need to generate IPIN via CRA website.

After successful login click on the Transact Online button given in the menu bar. Similar option is also available in the mobile app. Click on the “Change Scheme Preference” sub menu.

After clicking change scheme preference, you need to select account Tier type. On drop down make selection between Tier (I or II) and click on the next button.

In the next screen, you need to select PFM change and scheme preference change button. Check mark on both field and click on submit button.

You will be able to see scheme preference type selection button. Now select the preference type. There are four preference type.

Active Choice
Moderate Auto Choice
Aggressive Auto Choice
Conservative Auto Choice

You can select the option for the required change. You will be able to see only three option for the selection on screen. (As you have already opted one option from above)

After making a selection of preference click on the Add button. You will be able to see various PFM option as shown in the image below.

Select the PFM name from the dropdown menu and click on the submit button.

You will be taken to the page asking for confirmation. You need to click on Send OTP button.

On clicking send OTP button system will send OTP on your registered mobile number for making changes. On entering OTP, you will be able to see acknowledgement number on the screen. The CRA system will also send an email to your registered email ID once request is processed.

How to Change Percentage Allocation in NPS Fund?

The option of changing allocation in the NPS fund is given only if you have selected Active Choice while opening the account. If it is auto choice you will not able to change any allocation percentages. In auto choice fund percentage are allocated based on life cycle.

The process of changing fund allocation percentage is somewhat similar.

Login to CRA system (cra-nsdl.com) via User ID and IPIN and password.
Click on Transact Onlinefrom menu bar and click on the Change Scheme Preference sub-menu.
Select a Tier Type from dropdown and provide the type of Tier (I or II) in which you want to make changes,
Make selection of Scheme-preference % change and Click on the submit button.
Click on the Add button and
Click on Add Button, select the Pension fund from drop down options. Once scheme is selected change the percentage contribution by making entry in the Percentage Contribution
Once you are done click on submit button. You will see confirmation page. Click on Send OTP button.
OTP will be sent to registered mobile number. On entering OTP system will show acknowledgement number for the changes.
The changes shall also be intimated via SMS and email.

Resident Foreign Currency Account – RFC Account for returning NRI

Banking

Shitanshu Kapadia

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February 4, 2020

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Resident Foreign Currency Account – RFC Account for returning NRI

Resident Foreign Currency Account (RFC Account) is a special bank account that can be maintained by resident Indians in foreign currency.

NRI returning to India always worried about what to do with foreign assets and money earned in foreign currency. Common questions asked by NRI’s are – Can I hold foreign currency after returning to India? What is to be done for NRO, NRE and FCNR accounts and deposits? Do I need to convert it in Indian rupee? What will be tax implications?

In this post, I will try to give answers to NRI questions related to NRO, NRE, FCNR and RFC accounts. I will start with RFC account and later stage cover What will happen to NRO, NRE and FCNR accounts?

What is the Resident Foreign Currency Account?

Resident Foreign Currency Account as the name indicates it is a foreign currency account. It is opened and maintained by NRI returning to India. NRI can bring back foreign currency in this account while returning from overseas.

The foreign currency held by NRI when he was resident outside India can be deposited to RFC accounts. This includes funds such as deposits in banks account outside India, real estate properties, shares, and securities as well and money earned by doing business outside India which is held in foreign currency. All these can be deposited in RFC account.

Additionally, earnings via self-employment, job or business when a person was outside India as NRI can be deposited in RFC account. All the money held in NRE/FCNR account can also be transferred to RFC accounts.

RFC accounts are of different types such as saving account, current account or term deposit account. The term deposit account can be maintained for one year to three years.

Also Read – How NRI can get benefits of DTAA agreement of Taxation?

How to open RFC Account?

To open the RFC account, you need to submit a duly filled RFC account opening form available at the bank where you want to open the account. Few banks provide a facility to download this form online from the bank’s official websites.

You need to attach a self-attested passport copy, address proof, expired work permit/employment visa. PIO or OCI card is also required.

This account can be opened only if you are NRI living abroad for one year or above and returning to India permanently. You can take help of a bank representative or agent to open this account.

RFC Account General Information

RFC account can be maintained in a limited number of currencies. The most common currencies are USD, GBP, Euro, AUD and CAD.
The interest will be earned on these deposit. The interest rate is in range of 2.5-3.5%. The interest rate is credited quarterly and taxable.
RFC account can be opened as a saving, current or term deposit account. No loan is applicable on this account.
You can use RFC fund for remittance or investment abroad. You can also use this funds for maintenance of dependents or any personal living abroad.
The fund deposited in this account can be used for making investment in India. A withdrawal from this account can be made in rupee only and deposited in resident saving bank account.
Nomination facility is available in this account.

Benefits of RFC Account

The balance in RFC account is fully repatriable. You can transfer both principal and interest amount.
The principal and interest amount is maintained in foreign currency. This means no exchange risk is involved.
The amount deposited in this account can be converted in different currencies such as USD, GBP, AUD, CAD etc.
Interest is payable on this account. The interest rate varies from bank to bank.
You can transfer fund to other account at abroad. You can also transfer this fund to other NRE/FCNR account.

What happens to NRO, NRE and FCNR account after returning to India?

As per FEMA provision, only NRI can hold NRO, NRE and FCNR account. As you are returning back to India you cannot continue these accounts. You need to inform your bank about change in your residential status.

Your NRO and NRE account will be re designated as a resident rupee account. FCNR and NRE deposit can be closed immediately or can be continue up to maturity period. A premature closer will attract a penalty.

If you wish you can transfer FCNR and NRE funds held in foreign currency to RFC account. It can help you to save premature closer charges & penalties.

Quant Fund – Should you invest in Quant Funds?

Mutual Funds

Shitanshu Kapadia

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January 29, 2020

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Quant Fund – Should you invest in Quant Funds?

A quant fund is a new concept in India. Quant Fund is a type of mutual fund that is managed using quantitative analysis and artificial intelligence.

As you are aware that mutual funds are managed by the fund managers. A fund manager invests money based on research analysis and investment strategies. This means investment decision in a mutual fund is influenced by human intelligence. Human minds are prone to mistakes. This gives birth to a new type fund called Quant Funds.

What is Quant Fund?

A quant fund is one type of mutual fund. The investment decision in this fund is not taken by a human being. The decision is taken by software programs that are based on predictive models, hidden patterns, statistical techniques, and quantitative analysis. The predictive model is known as the quant fund model. Quant fund models are based on back-tested data.

The followers of the quant fund say that the scope of human error in this fund is very less and almost negligible hence these type of fund is likely to perform better. However, as these funds work on historical data and artificial intelligence it cannot handle unprecedented events. This fund has a similar risk profile of the thematic fund.

Also Read – Thematic Funds, Sectoral Mutual Funds – Good for Investment?

How Quant Mutual Fund Works?

Quant Mutual Fund works on the predefined algorithms and historical data. The large diverse data & information are stored at the backend computational system of this fund. This fund makes use of the latest technologies such as data science and AI to process and analyze large data in generating meaningful information.

The quant system behind this fund selects the best available stock option that is likely to generate a good future return. The buy and sell decisions are given based on academically researched and complex decision-making systems. This fund restricts the choice of stocks based on the model. The quant model eliminates the involvement of human emotion and sentiment while buying and selling stocks.

The quant model to perform quantitative analysis using the computer-based model can be either outsourced or can be designed by the fund house internally.

The method used by the quant fund for the selection of equity is given below.

Analysis of Past Economic data like GDP, interest rate, market condition like index return.
Classification of stocks.
Usage of Machine Learning and AI algorithm to predict the factor combination that will outperform in the forthcoming month.
Create Optimal Stock Portfolio.
Estimate Market Direction.
Hedge/Buy Optimal Portfolio.
Repeat the above sequence.

The factors used for the prediction are Alpha, Value of stock based on ROCE, PE ratio, Quality of stock based on ROE, EPS and dividend earning ratio.

Famous Quant Mutual Funds in India

(1) Nippon India Quant Fund

Nippon India Quant Fund seeks to generate capital appreciation by investing in an active portfolio of stocks selected based on the quant model. 99.85% of the net allocation of this fund is equity and remaining in the cash component.

If we see the last five years of historical data, this fund is unable to perform and generated poor returns compared to the benchmark.

(2) DSP Quant Fund

DSP Quant fund is a new fund that was launched six months back. As per fund objective, the stocks are selected, weighed and rebalanced using stock screeners, factor-based scoring and an optimization formula that aims to enhance portfolio exposures to factors representing good investing principles such as growth, value, and quality within risk constraints.

As it is a new fund historical performance detail is not available. But, this fund has given good return since inception.

(3) Tata Quant Fund

Tata Quant Fund is recently launched. Objective of this fund is to generate medium to long term capital appreciation by investing in equity selected based on quant model. It is new fund and no historical data available as on 30th Jan, 2020.

Should you invest in Quant Mutual Funds?

At the first instance, the Quant Mutual fund seems to be a lucrative investment option. However, before deciding about investing in this fund you should look at the positive and negative side of this fund. Details are given below.

Benefits –

This fund reduces/eliminates human error, bias, and emotions.
Leverage the strength of Artificial Intelligence (AI) for investment strategy formulation.
Consistency in strategy.
Disciplined investment process claim to be offering high returns.
Restricted choice of stock based on model and algorithm.

Drawbacks –

The success is based on the quant model and analysis performed.
As analysis is done based on historical data, this fund can not handle complex market conditions.
The model should be constantly updated based on evolving market realities.
There is no firm evidence that these funds can reliably outperform over time.

Looking at benefits and drawbacks you must have made up your mind about the quant fund. As per me, this fund is slightly new and risky. There is no established track record available for these types of funds. It is not yet become a matured investment product. An investor should stay away from quant funds as of now. If you are highly influenced by this fund you can allocate 5% of the equity portfolio in this fund. As this fund is available in multiple categories you should be absolutely sure about selection of category.

How to Unfreeze Your Frozen NPS Account?

Investment

Shitanshu Kapadia

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January 26, 2020

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Hey there, have you ever felt that sinking feeling when you check your National Pension System (NPS) account, only to find it’s frozen solid? It’s like trying to sip a smoothie through a straw that’s clogged up—frustrating, right! Well, don’t panic just yet. In this article, we’re diving deep into how to unfreeze your frozen NPS account, making the process as straightforward as possible. Whether you’re a newbie to NPS or a seasoned saver who’s hit a snag, I’ve got your back.

First off, let’s get the basics straight. The NPS is India’s go-to retirement savings scheme, designed to help folks like you build a nest egg for those golden years. But sometimes, life throws curveballs—maybe you missed a contribution, or there was some paperwork mix-up—and bam, your account freezes. It’s not the end of the world, though! Learning how to unfreeze your frozen NPS account can get things back on track quicker than you think.

We’ll cover everything from why accounts freeze to the nitty-gritty steps on how to unfreeze your frozen NPS account. Along the way, I’ll sprinkle in some real-life tips, a handy FAQ section, and even a conclusion to wrap it all up. By the end, you’ll feel empowered, ready to tackle this head-on. So, grab a cup of coffee, settle in, and let’s melt away that freeze!

Understanding NPS and Why It Freezes

Before we jump into how to unfreeze your frozen NPS account, it’s worth taking a moment to understand what NPS really is. Think of it as your personal retirement piggy bank, managed by the Pension Fund Regulatory and Development Authority (PFRDA). You contribute regularly, invest in funds like equities or bonds, and watch your money grow over time. Sounds simple, doesn’t it?

But here’s the kicker: NPS accounts can freeze for a bunch of reasons, and ignoring them is like letting ice build up on your windshield—you can’t see where you’re going! Common culprits include non-payment of minimum contributions (yep, that ₹500 annual minimum for Tier I accounts), KYC issues, or even dormant status if you haven’t logged in or transacted for ages. Oh boy, and if you’re an NRI, currency conversion hiccups can add to the mess.

Dangling in the background, regulatory changes sometimes play a role too, catching people off guard. For instance, if your employer stops deducting contributions without notice, your account might slip into freeze mode. And let’s not forget fraud alerts—banks or the CRA (Central Recordkeeping Agency) might lock it down if they spot suspicious activity. Understanding these triggers is key because, as they say, knowledge is power when figuring out how to unfreeze your frozen NPS account.

Signs Your NPS Account Is Frozen

Now, how do you even know if your account’s on ice? It’s not like it sends you a postcard saying, “Hey, I’m frozen!” Instead, watch for red flags. Logging into the NPS portal and getting error messages? That’s a big one. Or maybe your contributions bounce back, or you can’t withdraw partial amounts. Exclamations like “Account Inactive” popping up on your screen—yikes!

Transitional phrases aside, let’s list out some telltale signs in a quick bullet point rundown:

Failed Transactions: Attempts to add money or switch funds just won’t go through.
No Statements: Your quarterly or annual statements stop arriving in your inbox.
Portal Access Issues: The website greets you with warnings about compliance.
Communication from CRA: Emails or SMS from NSDL or Karvy (the CRAs) hinting at problems.

If any of these ring a bell, it’s time to act. Procrastinating? That’ll only make the thaw harder. Better to nip it in the bud and learn how to unfreeze your frozen NPS account pronto.

Preparing to Unfreeze: Gather Your Documents

Alright, let’s gear up! Before diving into the steps on how to unfreeze your frozen NPS account, you’ll need to round up some paperwork. It’s like packing for a trip—you don’t want to forget your passport, do you?

Start with your PRAN (Permanent Retirement Account Number)—that’s your NPS ID card, basically. Then, grab your PAN card, Aadhaar, or any other KYC documents. If the freeze is due to missed payments, have proof of past contributions handy. For NRIs, passport copies and address proofs are a must.

Here’s a numbered list to make it crystal clear:

Identity Proof: PAN, Aadhaar, or Voter ID.
Address Proof: Utility bills or bank statements.
Bank Details: Linked account info for verifications.
Contribution History: Statements showing what you’ve paid so far.

With these in hand, you’re set. Informal chats with friends who’ve been through this often reveal that missing even one doc can delay things by weeks. So, double-check, and let’s move on to the main event: how to unfreeze your frozen NPS account.

How to Unfreeze Your Frozen NPS Account: Step-by-Step Guide

This is the meat and potatoes of the article— the part where we break down how to unfreeze your frozen NPS account without breaking a sweat. It’s not rocket science, but it does require patience. First things first, log into the official NPS portal at www.npscra.nsdl.co.in or through your CRA’s site.

Step 1: Check the Status

Once logged in, head to the ‘Account Details’ section. If it’s frozen, it’ll say so loud and clear. Note down the reason— that’ll guide your next moves.

Step 2: Update KYC if Needed

A lot of freezes stem from outdated KYC. Upload fresh documents via the portal. It’s a breeze: scan, upload, and submit. Wait for verification, which usually takes 2-3 days.

Step 3: Make Pending Contributions

If non-payment’s the issue, pay up! Use net banking or UPI to deposit the minimum amount. For Tier I, it’s ₹500 yearly; Tier II has no minimum but needs activity.

Step 4: Submit Unfreeze Request

Here’s where it gets specific on how to unfreeze your frozen NPS account. Navigate to the ‘Grievance’ or ‘Service Request’ tab and select ‘Account Reactivation.’ Fill in the form, attach docs, and hit submit. You’ll get a reference number—keep it safe!

Step 5: Follow Up

Don’t just sit back; check status via email or the portal. If it’s taking forever, call the helpline at 1800-222-080. Persistence pays off, folks!

Throughout this process, remember: mistakes happen. If you fat-finger a detail, correct it ASAP. And hey, if you’re dealing with a corporate NPS, loop in your HR—they might handle some legwork.

Common Pitfalls When Trying to Unfreeze

Even with a solid plan on how to unfreeze your frozen NPS account, pitfalls lurk around every corner. Ignoring emails from the CRA? Big no-no—that’s like burying your head in the sand. Or rushing through document uploads without verifying quality; blurry scans get rejected faster than you can say “oops!”

Another trap: assuming it’s unfrozen automatically after payment. Nope, you often need to request it formally. And for heaven’s sake, don’t use outdated apps or browsers—the portal’s picky about that.

To steer clear, here’s some advice in bullets:

Stay Updated: Subscribe to NPS newsletters for rule changes.
Backup Docs: Keep digital copies in the cloud.
Seek Help Early: Forums like Reddit’s r/IndiaInvest have real stories.
Avoid Scams: Only use official sites; phishers love frozen accounts.

Dodging these will make how to unfreeze your frozen NPS account feel like a walk in the park.

Tips to Prevent Future Freezes

Prevention’s better than cure, right? Once you’ve mastered how to unfreeze your frozen NPS account, let’s talk keeping it thawed. Set up auto-debit for contributions—that way, you never miss a beat. Review your account quarterly, like checking your car’s oil.

For NRIs, use rupee-denominated accounts to sidestep forex issues. And if life’s busy, appoint a nominee or power of attorney for smooth sailing.

Informal tip: Link your NPS to your banking app for reminders. Exclamation ahead: Don’t let it go dormant—log in at least once a year! Little habits like these ensure you won’t need to search “how to unfreeze your frozen NPS account” again.

Advanced Strategies for NPS Management

Taking it up a notch, beyond basic how to unfreeze your frozen NPS account stuff. Consider switching to active choice for investments—pick your funds wisely based on risk appetite. Or explore Tier II for liquidity without freezes.

If you’re nearing retirement, plan partial withdrawals carefully to avoid triggers. And for the tech-savvy, use NPS apps for real-time monitoring. Dangling with possibilities, integrating NPS into your overall financial plan can yield big rewards.

FAQs

Got questions? You’re not alone! Here are some common ones about how to unfreeze your frozen NPS account.

What if my NPS account freezes due to fraud?

Report it immediately to the CRA. They’ll guide you through verification and unfreezing.

How long does it take to unfreeze?

Typically 7-15 days, but it can stretch if docs are incomplete.

Can I unfreeze offline?

Yes, visit a POP (Point of Presence) like banks with forms.

Is there a fee?

Usually no, but late payment penalties might apply.

What if I’m overseas?

Use the portal or authorize someone via PoA.

Does freezing affect returns?

Nope, investments still grow, but you can’t access or add funds.

How to check if it’s unfrozen?

Log in and try a small transaction.

Can multiple freezes happen?

Sure, if issues persist—stay vigilant!

Conclusion

Whew, we’ve covered a lot, haven’t we? From spotting the freeze to mastering how to unfreeze your frozen NPS account, you’re now armed with the know-how to handle this curveball. Remember, it’s all about staying proactive—regular checks, timely payments, and quick action when things go south.

Don’t let a frozen account derail your retirement dreams; think of it as a bump in the road. With the tips here, you’ll be back in the saddle in no time. If issues persist, consult a financial advisor