Ten years of investing in the NPS: Performance report
After ten years of investing in NPS (tier 1, central govt scheme) this is how my investments have fared since March 2010.
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EPF vs NPS: Should you shift to NPS because the govt wants you to?
The govt is keen on offering an option to shift from EPS to NPS. While this is a good move from their viewpoint, does it make sense for existing EPF investors to shift to NPS in search of higher returns? We look at the key differences between EPF and NPS to find out
Continue reading →NPS Tier 1 Equity Scheme Performance vs Nifty 50 and Nifty 100
Here is how the NPS Tier 1 Equity Schemes (“E”) have performed since inception. Many mistakenly assume NPS equity schemes are index mutual funds tracking Nifty 50. A look at the scheme portfolios would immediately dispel that myth. The NPS E schemes hold close to 100 stocks. Getting the historical NAV history of the NPS…
Continue reading →Do Not Invest Rs. 50,000 in NPS for additional tax saving benefit in 2019!
Here is why you should not invest Rs. 50,000 to get additional tax saving in NPS under section 80CCD(1B) in 2019. The following tax deductions are applicable to the National Pension Scheme. (1) An individual can invest a maximum of Rs. 1.5 Lakhs in Tier 1 for tax deduction under Section 80CCD(1) which is part of…
Continue reading →Myth busted: You do not get 30% returns by investing 50,000 in NPS!
You would be surprised as to how many people believe that by investing an additional 50,000 in NPS, they “instantly” get a return equal to their tax slab! This is a case of mis-accounting or innumeracy. In this post, I discuss what exactly is the implication of “saving tax” via investing in 80C and with…
Continue reading →Do Not Shift Your EPF Corpus to NPS: It is a Trap!
In this post, I discuss why it is a terrible idea to shift your EPF corpus to the NPS (National Pension Scheme). In a circular dated 6th March 2017, the Pension Fund Regulatory and Development Authority (PDRDA) announced a road map for provident fund and superannuation plan subscribers to shift to the NPS. The shift…
Continue reading →National Pension System (NPS): Exit and Withdrawal Rules
There has been a lot of confusion regarding the exit and withdrawals rules of the National Pension System (NPS). I apologise if I have contributed to it. In this post, I shall attempt to get rid of my own confusion and clarify my understanding. Until today I have incorrectly believed that 40% of the NPS corpus…
Continue reading →NPS Tier 1 Corporate Scheme (C) Performance – Oct 2016
NPS Tier 1 and Tier 2 plans have a corporate scheme (C) which has a mandate to invest in bonds issued by public sector undertakings (PSUs), public financial institutions (PFIs), infrastructure bonds, private corporate bonds and bank deposits. This is like a short-term diversified debt fund with about 50% of a banking and PSU fund…
Continue reading →NPS Tier 1 Equity Scheme (E) Performance – Oct 2016
A look at how NPS Tier 1 Equity schemes (E) have performed. With the increase in popularity of NPS because of the clever introduction of additional tax saving benefits – which one should avoid, more and more people are searching for “best NPS pension fund manager”. The reality is that there is nothing much to…
Continue reading →How the power of compounding gave birth to the National Pension System
My mother retired 13 years ago and started receiving a pension that was indexed to inflation. Not only did it increase twice a year, thanks to DA hikes, it also increased as a result of pay commissions. The average year on year growth of her pension is close to 13%. This is an astounding number…
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