During the last one year, Tier 1 account of HDFC Fund has given 21.77% returns. After this, the Prudential Pension Fund has given the highest return. The returns of this fund have been 20.50 per cent.
In the case of National Pension Scheme i.e. NPS Returns, it seems to be doing better than all savings instruments. All the fund managers managing NPS related funds have given excellent returns during the last one year. Both equity and debt investment have given good returns. Both Tier 1 and Tier 2 accounts of NPS have given good returns. Due to the boom in the stock market, the returns have reached 22 percent.
What is the reason for high return of NPS funds?
During the last one year, Tier 1 account of HDFC Fund has given 21.77% returns. After this, the Prudential Pension Fund has given the highest return. The returns of this fund have been 20.50 per cent. At the same time, the returns of AIC Pension Fund have been 17.96 percent. As such, investing in NPS is recommended for retirement planning. But it works more like an investment instrument than a savings. Actually, the funds associated with NPS are managed by skilled managers like mutual funds. This is the reason why they ensure better returns for investors by allocating funds well in equity and debt funds.
Where do NPS related funds invest?
NPS funds invest in investment instruments such as shares, corporate debentures, government bonds. The subscriber has the option to invest in equity and other instruments. There is a limit to investment in equity according to different categories. Subscriber can withdraw money from Tier 1 account of NPS after retirement. However 60% of the amount can be withdrawn outright. This amount is tax free. You get the remaining annuity as a monthly pension. There is no restriction on withdrawal from Tier-2 account of NPS.