HDFC Pension Fund has given the highest return on investment of 14.14% since its inception on 1 August 2013. Among other pension fund managers, LIC PF has given a return of 12.24% while UTISRL, ICICI PF, Kotak PF and Birla PF have given over 11% returns since their respective launch dates.
As many as seven Pension fund managers under the NPS Scheme – C (Tier 1), which invests in corporate bonds, have also given a return between 8.43% to 9.72% since their respective launch dates. The returns from NPS Scheme – G (Tier 1), which invests in Government securities, have also been between 9% to 10% since the respective launch dates of most of the funds.
NPS is considered one of the best ways to save for retirement and subscribers are provided with different investment options – such as equity, government securities, corporate bonds etc. – to choose as per their risk appetites. Data shows that returns from NPS Scheme E, which gives returns based on investments in equity stocks, are higher compared to other schemes under NPS. However, the risk is also higher for investments under Scheme E.
NPS return calculation
The returns from this NPS Scheme E (Tier 1) in the last 10-12 years show that subscribers can collect an amazing retirement corpus at the time of exit if the schemes continue to deliver similar returns.
For instance, if we assume even 10% average returns under NPS Scheme E, a subscriber investing just Rs 5000 per month in the scheme can accumulate a corpus of Rs 1.89 crore in 35 years, Rs 1.13 crore in 30 years and Rs 66 lakh in 25 years, NPS calculator shows.
Further assuming 10% returns from NPS Scheme E (Tier 1), a subscriber investing Rs 10,000 per month can accumulate a corpus of Rs 3.8 crore in 35 years, Rs 2.26 crore in 30 years and Rs 1.32 crore in 25 years, NPS calculator shows.
Similarly, a subscriber investing Rs 15,000 per month in NPS Scheme E (Tier 1) can accumulate a corpus of Rs 5.69 crore in 35 years, Rs 3.39 crore in 30 years and Rs 1.99 crore in 25 years, the NPS calculator shows.
Investments under NPS also qualify for income tax deduction. While under Section 80CCD (1), a deduction of up to Rs 1.5 lakh is allowed, a further deduction of Rs 50,000 is allowed under 80CCD (1B). This way, the total deduction an NPS subscriber can claim per year goes up to Rs 2 lakh, which is equivalent to a monthly contribution of Rs 16,666.
The NPS calculator shows that by investing Rs 16,500 per month under NPS Scheme E (Tier 1), s/he can accumulate a corpus of Rs 6.26 crore in 35 years, Rs 3.72 crore in 30 years and Rs 2.18 crore in 25 years, assuming 10% returns.
Disclaimer: The above content is for information purposes only. Please consult your financial advisor before investing