NPS scheme is operated by PFRD. There are two types of accounts in this. Investing in Tier 2 may be better for higher returns.
Opportunity to get better returns by investing in NPS
To keep the future secure after retirement, people usually want to invest money in such a scheme which gives both security and better returns. Nowadays, investing in mutual funds especially through SIP, but investing in National Pension System ie NPS can also prove to be beneficial. It gives almost the same returns as mutual funds. In this, you can make a good fund in just 5 years.
There are two types of accounts in the National Pension System. First Tier-I and Second Tier-II. Tier-I is a retirement account, which is mandatory for every government employee to open. On the other hand, Tier-II is a voluntary account, in which any salaried person can start investing and withdraw money at any time. The minimum age limit for investing in NPS is 18 years. Whereas the maximum age is 60 years.
Recently, LIC Pension Fund Tier-II NPS Accounts have given the highest double-digit returns in the last three years. If you also want to become a millionaire in a short span of time, then investing in NPS Tier-2 can be beneficial.
Benefits of NPS Tier-2 Account
Along with monthly pension in NPS, you also get a lump sum amount at the age of 60. In NPS Tier-2, you can withdraw money as per your requirement. In this scheme, an account can be opened with Rs 1,000. It is necessary to contribute at least Rs 250 in a year. Almost all the National Pension System Tier 2 has given double digit returns in the last three years. It is said that 7 major pension fund managers have given returns of 11.01 per cent to 13.5 per cent per annum. LIC Pension Fund has given the highest return of 11.88 per cent even in the return period of 5 years. Whereas CCIL Sovereign Bond and 10-year Gilt Mutual Fund have given returns of only 10.78 percent.
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