Returns on NPS scheme depend on how the pension funds perform in the market, in which the deposited money is allocated. Currently, there are eight pension fund managers in India. You may expect an average NPS return ranging from 9% – 12%. Returns may fluctuate.
To understand NPS returns, i.e. how your NPS money grows and how the funs is allocated in various pension funds, read this article.
What is NPS: Learn the Basics
The National Pension Scheme, commonly known as the National Pension System, is available to all public, private, and unorganised employees, except members of the Armed Forces.
Plan users may make a minimum contribution of Rs 6,000 every fiscal year to claim NPS Returns, which may be paid in one lump sum or monthly instalments of Rs. 500.
Latest on NPS Returns
The Pension Fund Regulatory Authority (PFRDA) has increased the ceiling for National Pension System or NPS investments to a maximum of 75%, from the age of 51 years.
This came into effect on 21-Oct-2022, under NPS Active Choice to invest in Asset Class E (equity).
(Source: The Economic Times)
Pension Funds in India
As of now, there are 9 Pension Fund managers in India, viz.:
- SBI Pension Fund Pvt. Ltd.
- LICPension Fund Pvt. Ltd.
- UTI Retirement Solutions Ltd.
- Max Life Pension Fund Pvt. Ltd.
- HDFC Pension Management Co. Ltd.
- ICICI Prudential Pension Fund Management Co. Ltd.
- Kotak Mahindra Pension Fund Pvt. Ltd.
- Tata Pension Management Ltd.
- Aditya Birla Sunlife Pension Management Ltd.
NPS Returns: Types of NPS Schemes
The following are the various NPS schemes managed by Pension Funds::
- Central Government Scheme
- State Government Scheme
- Corporate CG Scheme
- NPS Lite Scheme
- Atal Pension Yojana
- Scheme – E (Tier-I)
- Scheme – E (Tier-II)
- Scheme – C (Tier-I)
- Scheme – C (Tier-II)
- Scheme – G (Tier-I)
- Scheme – G (Tier-II)
- Scheme – A (Tier-I)
- NPS Tax Saver Scheme
NPS Returns: Benefits of NPS
- High-Interest Returns: A part of the NPS Benefits and contribution is invested in stocks, providing better returns than conventional tax-saving investment choices such as PPF. This plan is best suited for people who wish to invest for the long term and live a financially secure life after retirement, with return rate of 9-12% (may fluctuate).
- NPS Benefits in Taxation: Contributions to NPS account are tax-deductible up to Rs.1.5 lakhs under Income Tax Act Section 80C. Payments to the National Pension Scheme are tax-deductible for employers as well.
NPS Returns: FAQs
You cannot have several NPS accounts since NPS can be transferred across locations and sectors; no new accounts are required.
NPS or National Pension Scheme is regulated by the Pension Fund Regulatory and Development Authority of India, PFRADAI.
Any individual citizen of India (resident and non-resident) between the ages of 18 and 65 (as of the date of application) is eligible to join NPS.
All NPS plan subscribers require contributions, whether private or government employees. From the date of the membership until the age of 60, this will be paid monthly.
Except for government employees, the government does not make contributions to your NPS account.