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Returns – 1 years
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-13.45%
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-2.25%
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-12.27%
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-12.85%
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-11.78%
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Returns – 3 months
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-6.56%
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0.41%
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-5.75%
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-6.13%
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-6.51%
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National Pension Scheme (NPS) is a retirement scheme approved by the government. It is applicable for Indian nationals in the age group of 18-60 years. It is a defined contribution based pension fund where if an employee of an organization decides to invest in the scheme, the employee will contribute an equal amount to the individual’s account. It is mandatory for Central Government and State Government employees and optional for others. T
NPS funds are invested in equity, government securities and other securities such as corporate bonds, fixed deposits etc. These funds are managed by LIC Pension Plan, SBI Pension Plan and UTI Retirement Solutions for the government employees. The money invested by employees in other organizations is managed by one of the following fund managers –
- ICICI Prudential Pension
- Kotak Mahindra Pension
- Reliance Capital Pension
- SBI Pension Funds and
- UTI Retirement Solutions
There are a couple of new entrants here and IDFC has discontinued its association with this product.
What options are available to the investor?
NPS has many options for an investor. The investor can choose to allocate the money invested in equity instruments, Government securities or other fixed income securities including liquid funds, corporate bonds etc. The investor can also choose if he wants to manage the amount to be allocated in each asset class or the allocation should be based on his age automatically. There are many funds that will invest on the individual’s behalf and he can choose any of them.
What are the Tax Benefits of NPS?
You can invest from Rs. 6,000 to any amount. You will get tax deduction under the new Section 80CCD (1b) above the Rs 1.5 lakh investment limit under Section 80C for Tier I accounts up to Rs. 50,000.
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Details
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ICICI Prudential Pension
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Kotak Mahindra Pension
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Reliance Capital Pension
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SBI Pension Funds
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UTI Retirement Solutions
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NAV as on Jan 29
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19.23
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18.66
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18.32
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16.39
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18.92
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Executive Summary – National Pension Scheme is a retirement scheme wherein one can invest now so that he can have a pension post retirement for a certain time period. Here the returns of some of the NPS Schemes have been assessed. NPS is a good product if you want a regular income post retirement but has some issues such as tax on withdrawal at the time of maturity and one has to buy an annuity plan with the sum received after maturity.
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Returns – Since Inception
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10.10%
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9.54%
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9.27%
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7.54%
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9.85%
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Details
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ICICI Prudential Pension
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Kotak Mahindra Pension
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Reliance Capital Pension
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SBI Pension Funds
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UTI Retirement Solutions
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NAV as on Jan 29
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18.485
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17.0457
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16.6354
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18.485
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16.9945
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Returns – 3 months
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-0.85%
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-0.29%
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-0.97%
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-0.81%
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-0.40%
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Returns – 1 years
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3.81%
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7.02%
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3.71%
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3.73%
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4.36%
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Returns – Since Inception
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8.82%
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8.10%
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7.73%
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9.45%
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8.12%
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Details
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ICICI Prudential Pension
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Kotak Mahindra Pension
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Reliance Capital Pension
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SBI Pension Funds
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UTI Retirement Solutions
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NAV as on Jan 29
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20.241
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20.0546
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18.2743
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20.4047%
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18.5042
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Returns – 3 months
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0.60%
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1.28%
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0.94%
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0.86%
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0.95%
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Returns – 1 years
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8.68%
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9.80%
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7.70%
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7.51%
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7.85%
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Returns – Since Inception
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10.93%
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10.70%
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9.22%
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11.05%
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9.49%
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National Pension Scheme is a retirement scheme wherein one can invest now so that he can have a pension post retirement for a certain time period. NPS is a good product if you want a regular income post retirement but has some issues such as tax on withdrawal at the time of maturity and one has to buy an annuity plan with the sum received after maturity.
NPS funds have done well in the longer term. Recently returns have not been good for Scheme E as the stock market has taken a beating. The NPS is a long term product in which one invests to secure his/her retirement. If you are not sure about your skills in investing in different products, you can consider the NPS as there are experts who will manage the funds. Moreover the cost is low. But there are some other issues such as tax on withdrawal and part of the amount received at the end of the tenure has to be used for purchasing an annuity plan. If these conditions are okay, you may go ahead else there are other products like Mutual funds and direct equity where there are no restrictions on withdrawals and no tax on long term gains in equity and equity based funds. PPF also has no tax in withdrawal at the end of the tenure.
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