National Pension System: Investors have got good returns due to the better performance of the equity market in the financial year 23-24. Sensex and Nifty have reached record levels. The inclination of investors has increased towards such a scheme through NPS in which up to 75 percent can be invested in equity.
What is NPS: If you are employed and are worried about expenses after retirement, then you can invest in National Pension Scheme (NPS). Some people are earning good returns in the stock market through mutual funds or by investing directly. The stock market is making new records these days. Experts estimate that this pace will continue in the coming times. But not everyone is ready to invest directly in the stock market. If you are also confused about investment then investing in NPS can be your right decision. You get double benefit by investing in this. The first is that you get excellent returns and also get the facility of pension after retirement. Let us talk about this in detail-
Option to invest in equity up to 75 percent
Investors have got good returns due to the better performance of the equity market in the financial year 23-24. In the stock market, Sensex and Nifty have reached record levels. In such a situation, the inclination of investors has increased towards such a scheme through NPS in which up to 75 percent can be invested in equity. By investing through NPS, you also get rid of the hassle of investing in the stock market. Also, you do not have to worry about expenses after retirement. Due to the rise in the stock market, the AUM of the National Pension Scheme (NPS) has also increased rapidly.
Excellent returns up to 24% annually in NPS
The AUM of NPS has increased to Rs 1.8 lakh crore, in which equity contributes 17 percent. Investors have got excellent returns of up to 24% annually. Pension Fund Regulatory and Development Authority (PFRDA) Chairman Deepak Mohanty says that since the introduction of NPS, investors have got 13.3 percent return in equity. Equity investment up to 100 percent is allowed in Tier-2. He said that after government employees in NPS, the number of private sector subscribers is also increasing rapidly. By December 2023, the number of private subscribers has increased to beyond 51 lakh.
What is NPS?
National Pension System (NPS) is a contributory pension scheme launched by the Government of India. This scheme has been started for regular income after retirement. It was started for government employees on 1 January 2004. But later it was started in 2009 with the aim of providing retirement benefits to all the countrymen. Its objective is to promote pension reforms and to promote the habit of saving for retirement among the countrymen. Salaried class or non-salaried class (business class) between the age of 18 to 70 years can invest in it.
Benefits of NPS
You can get regular income after retirement by investing in NPS. Apart from this, by investing in it you also get tax benefits. This benefit applies to both investment and withdrawal. You can also transfer NPS account from one employer or pension fund to another. Not only this, the investor can set the investment in his pension account as per his wish. There are three options for investing in NPS-
Equity
Investing in NPS through equity means that you are investing in shares. The price of shares may increase or decrease according to market trends. Therefore, investors investing in equity should be aware of the market risks.
Government bond
Government bonds are bonds issued by the government. Their interest rates are usually lower than equity. But the risk in this is less as compared to equity. If you want to invest risk free, you can increase your stake in government bonds.
Corporate bond
Corporate bonds are bonds issued by companies. Their interest rates are usually higher than government bonds but they carry more risk than equity.
How to open NPS Account
NPS accounts can be opened with Point of Presence (PoP) institutions. Many financial institutions including many private and public sector banks are also registered as POPs. You can access POP through the website of Pension Fund Regulatory and Development Authority (PFRDA). You can also open NPS account online through eNPS website.
