Government or non-government employees, anyone can invest in NPS. This scheme is linked to the market, so it gives good returns. However, this is also the reason for the high risk in it.
new Delhi. There are many advantages of investing in the National Pension System (NPS). The biggest advantage is that it gives better returns than many investment schemes. Therefore, if you start investing in this scheme early, then till retirement you can accumulate tremendous funds and your future life can pass without worrying about money. This is a pension scheme, so you get one part of the deposit amount in lump sum while some part has to be purchased for annuity. You can look at annuity like a pension.
In the National Payment System, you get 2 benefits after maturity. You take home 60 per cent of the funds generated in one go. With the second part i.e. 40% amount, you have to buy annuity. You get this every month, 3 months, 6 months or on an annual basis. With this, your financial condition remains sound after retirement. NPS is a market linked scheme, hence market related risks also remain in it. Be sure to keep this in mind before investing.
Prepare a fund of 1 crore
If you are 28 years old and invest 10 rupees every month in NPS and do this work till the age of 60 years, then the total amount deposited by you will be 38 lakh 40 thousand rupees. Although the return on this is very good, but by adding the negative returns that sometimes happen, let’s consider the average return as 10 percent. The total amount deposited in NPS has become Rs 2.80 crore. In this, you will get 60 percent amount i.e. Rs 1.6 crore in lump sum while you will also get a pension of Rs 75 thousand every month.
Negative returns in recent times
Satya Nadella, MD and CEO of Kfintech, writes that in the last few years, the way mutual funds are giving negative returns, almost the same situation has happened with NPS. However, he says that there is no need to scare investors from this. He believes that people should look at NPS just like a SIP. According to Nadella, the main reason for the decline in the returns of MFs in recent times is the market leaning towards large cap stocks. He said that whenever this happens in the market, schemes related to equity tend to go down. Instead of panicking, people should keep investing in NPS because the fruits of this wait will be very sweet in future.
