You do not have to necessarily pay your fees in the first year itself. If you do, you will benefit a lot from it. So yes it’s a luxury, not a necessity.
At IGNOU, you have to pay fees for only 2 years even if you take 5 years to complete the course. IGNOU exam fees are payable every time you appear, per course basis. Keep in mind that practical and theoretical exam fees are different for the same course.
Your course has a minimum of 2 to a maximum of 5 years of eligibility. It can be convenient if you deposit your fees for the second year and then opt for the exams within the stipulated 5 years. The major benefit will be that you become eligible to appear for exams in both years.
Keep the following points in mind regarding your eligibility to appear for an exam at IGNOU
You should have been registered for a course which is only possible after fee deposition.
After registering you should have completed the semester/year allocated.
Assignments must be submitted
Attendance must be complete (only if necessary)
The maximum period of registration validity for a 2-year programme is 5 years
You can appear for any course in any order.
If you have paid the fees for the 2nd year as well, you are free to merge both courses.
Simply, by registering for the 2nd year as well, you become eligible to complete your course anytime within 5 years. It does not matter if you do not appear on your first-year exams or do not complete your assignments. You can do it conveniently within 5 years.