Introduced in January 2004, the National Pension Scheme (NPS) initially served as a authorities-sponsored retirement plan solely for presidency staff. However, in 2009, it was expanded to embody all different sectors.
The NPS is ruled collectively by the federal government and the Pension Fund Regulatory and Development Authority (PFRDA) and is designed as an extended-time period, voluntary funding program tailor-made for retirement.
Also Read: Retire With Confidence: Expert Advice On Making NPS Your Retirement Game-Changer
The NPS assures a pension, with the potential for substantial funding beneficial properties even when it doesn’t promise a hard and fast pension quantity. The main goal of this system is to encourage staff to make constant contributions to their pension accounts throughout their working years.
Upon retirement, a subscriber has the choice to withdraw a portion of their collected corpus, whereas the remaining quantity is disbursed as a month-to-month earnings. This technique gives a gentle stream of earnings after retirement.
The NPS is split into two tiers: Tier one accounts and Tier two accounts. Individuals who select a Tier One account can withdraw money solely after they retire, however Tier Two accounts permit for early withdrawals.
Under Section 80 CCD of the Income Tax Act, investing within the NPS gives tax benefits of as much as Rs 1.5 lakh. Withdrawing 60 per cent of the NPS corpus makes it tax-free. This makes it an interesting choice for retirement planning because it gives the potential for a lump sum payoff.
Below is a breakdown of the efficiency of the personal sector NPS’s numerous funds (inventory funds, authorities bond funds, and company bond funds).
National Pension Scheme (NPS): Tier I Account
Aditya Birla Sun Life Pension
Equity Fund:
14.46% (Returns in 1 yr)
21.43% (Returns in 3 years)
12.52% (Returns in 5 years)
Government bond fund:
8.60% (Returns in 1 yr)
5.29% (Returns in 3 years)
9.23% (Returns in 5 years)
Corporate debt fund:
7.59% (Returns in 1 yr)
5.78% (Returns in 3 years)
8.80% (Returns in 5 years)
HDFC Pension Fund
Equity Fund:
13.63% (Returns in 1 yr)
22.45% (Returns in 3 years)
13.47% (Returns in 5 years)
Government bond fund:
8.47% (Returns in 1 yr)
4.99% (Returns in 3 years)
9.25% (Returns in 5 years)
Corporate debt fund:
7.60% (Returns in 1 yr)
6.19% (Returns in 3 years)
9.06% (Returns in 5 years)
ICICI Prudential Pension Fund
Equity Fund:
15.35% (Returns in 1 yr)
23.60% (Returns in 3 years)
13.35% (Returns in 5 years)
Government bond fund:
8.39% (Returns in 1 yr)
5.00% (Returns in 3 years)
9.01% (Returns in 5 years)
Corporate debt fund:
7.67% (Returns in 1 yr)
5.88% (Returns in 3 years)
8.57% (Returns in 5 years)
Kotak Pension Fund
Equity Fund:
15.18% (Returns in 1 yr)
23.09% (Returns in 3 years)
13.71% (Returns in 5 years)
Government bond fund:
8.42% (Returns in 1 yr)
5.15% (Returns in 3 years)
9.21% (Returns in 5 years)
Corporate debt fund:
7.36% (Returns in 1 yr)
5.64% (Returns in 3 years)
7.96% (Returns in 5 years)
LIC Pension Fund:
Equity Fund:
14.41% (Returns in 1 yr)
23.88% (Returns in 3 years)
12.65% (Returns in 5 years)
Government bond fund:
8.35% (Returns in 1 yr)
5.18% (Returns in 3 years)
9.74% (Returns in 5 years)
Corporate debt fund:
7.26% (Returns in 1 yr)
5.62% (Returns in 3 years)
8.75% (Returns in 5 years)
SBI Pension Fund
Equity fund:
13.48% (Returns in 1 yr)
22.04% (Returns in 3 years)
12.43% (Returns in 5 years)
Government bond fund:
8.60% (Returns in 1 yr)
5.00% (Returns in 3 years)
9.10% (Returns in 5 years)
Corporate debt fund:
7.38% (Returns in 1 yr)
5.78% (Returns in 3 years)
8.65% (Returns in 5 years)
UTI Retirement Solutions:
Equity fund:
14.01% (Returns in 1 yr)
22.29% (Returns in 3 years)
12.63% (Returns in 5 years)
Government bond fund:
8.57% (Returns in 1 yr)
5.01% (Returns in 3 years)
8.95% (Returns in 5 years)
Corporate debt fund:
7.52% (Returns in 1 yr)
5.47% (Returns in 3 years)
8.35% (Returns in 5 years)
Disclaimer: Readers are suggested to examine with licensed specialists earlier than taking any funding selections.
