NPS Returns: What you need to know.

NPS and retirement planning have become two unbreakable factors for Indian citizens. One of the key factors that makes it an attractive option among the masses is the potential NPS return rate over the period. People plan their retirement as a stress-free affair where they do not have to worry about financial aspects in their golden years. The capability of NPS returns has assured some individuals that they may live in peace after their retirement. So, in this blog, we’ll explore more about NPS return rates and how they have performed in the last few years.

NPS Scheme Returns: An Overview

The National Pension System invests in market-linked instruments, such as equities, corporate bonds, alternative investment funds, and government securities, unlike PFFs or FDs. It has the potential to grow funds over time. NPS returns also depend on how well the chosen pension fund managers invest your money.  

NPS Tier I Returns

NPS Tier I is the primary retirement account. It has tax benefits and restrictions on withdrawal before retirement. Over the last few years, NPS Tier II returns have averaged around:

Equity Funds:  14.49%* (Average, since inception)

Corporate Bonds: 9.02%* (Average, since inception)

Government Securities: 8.99%* (Average, since inception)

Alternative Investment Fund: 8.14%* (Average, since inception)

<Source: npstrust.org.in 

Click here to learn about NPS taxation benefits. 

NPS Tier II Returns

NPS Tier II is a voluntary savings account. Unlike a Tier I account, it doesn’t offer any tax benefits and also comes with full liquidity. Investors can redeem their money anytime they want, just like liquid mutual funds. Over the last few years, NPS Tier II returns have averaged around:

Equity Funds:  13.85%* (Average, since inception)

Corporate Bonds: 8.84%* (Average, since inception)

Government Securities: 8.94%* (Average, since inception)

 <Source: npstrust.org.in 

Final Thoughts

The NPS return rate makes it a smart choice for long-term investors looking for a balance of growth and safety. With both Tier 1 and Tier 2 options, flexibility in investment style, and proven NPS scheme returns, it’s clear why so many Indians are now considering NPS as a key part of their retirement planning. Whether you’re just starting out or looking to diversify your savings, understanding how NPS returns work can help you make an informed, confident decision for your future.