Benefits of NPS (National Pension Scheme)
1. Returns/Interest: A portion of the NPS is invested in equities (which may not provide assured returns). However, it provides substantially larger returns than other classic tax-saving investments such as the PPF. This plan has been in place for almost a decade and has produced annualised returns ranging from 9% to 12%. In NPS, you can also replace your fund manager if you are dissatisfied with the fund’s performance.
2. Risk Evaluation: The National Pension Scheme currently has an equity exposure cap ranging from 75% to 50%. This cap is 50% for government personnel. In the prescribed range, the equity component will decrease by 2.5% per year beginning with the year the investor turns 50. The cap, however, is set at 50% for investors over the age of 60. This stabilises the risk-return equation in favour of investors, implying that the corpus is relatively protected against equity market volatility. The earning potential of NPS is greater than that of other fixed-income programs.
3. Regulation: The PFRDA supervises NPS through transparent investment standards, as well as frequent performance assessments and monitoring of fund managers by the NPS Trust.
4. Flexibility: The NPS subscription is versatile. NPS members can contribute to the NPS fund at any time during the fiscal year and adjexceptappliesust the amount of their subscriptions. They are free to select their investing possibilities. They can access their account from any place and continue to use it even if they move or change jobs.