National Pension System (NPS) schemes show stellar performance as the equity and debt schemes by all the pension fund managers gave double-digit returns in the last one year. Both Tier-I and Tier-II accounts have shown mesmerizing returns. As the stock markets soared to new highs, the Scheme E of NPS delivered as high as 22% returns in the last one year, in line with the benchmark returns.
HDFC Pension Fund gave 21.77% returns in Tier I Account, in the last one year, followed by ICICI Prudential Pension Fund (20.50%), Aditya Birla Sun Life (20.90%). LIC Pension Fund generated the lowest return of 17.96% in the Scheme G of Tier I NPS Account.
Scheme E under Tier II Account of NPS also showed similar returns. Tier II Account in NPS is an add-on account which provides the flexibility to invest and withdraw from various schemes available in NPS without any exit load. While, Tier I Account of NPS has a lock in till 60 years of your age unless you extend it, there is no lock in period for Tier II account.
Debt schemes under NPS, Scheme C and Scheme G also delivered double-digit returns. Under Scheme C, which invests in corporate bonds, LIC Pension Fund gave the highest returns of 15.19% in the past one year. HDFC Pension Fund followed with 14.70% returns. The lowest return under the Scheme C was 12.98%.
Scheme G, which invests in government securities, on an average gave 13.66% returns in the last one year. The returns fell in the range of 13.11% to 14.45%.
Tier II Account also showed similar returns.
Experts believe returns should not be the reason to start investing in NPS. NPS is a long term investment instrument to save for your retirement.It is a market-linked product. The returns in NPS schemes will be volatile.
Focus on your goal and do not get carried away by the short term volatility. NPS offers various investment options- equity, corporate bond, government securities and alternative investment funds. It also allows to invest in a mix of asset class. While deciding to invest in NPS, apart from looking at the performance of various schemes, match your risk profile with the schemes on offer.
