NPS returns are the earnings or profits generated from the investments made under the National Pension System (NPS). Your money is invested in government bonds, equities, and corporate debt, and the returns depend on how those investments perform.
Key Features of NPS Returns
1. Market-Linked Returns
Unlike traditional pension plans, NPS returns are not fixed.
They depend on how well your chosen investment options perform.
2. Choice of Asset Classes
NPS gives you 4 investment options:
- Equity (E): Up to 75% in stocks
- Corporate Bonds (C): Debt from companies
- Government Bonds (G): Safe, low-return govt securities
- Alternative Assets (A): Real estate, etc. (for advanced investors)
You can choose allocation manually or use Auto Choice (age-based)
3. Multiple Fund Managers
NPS offers 10 fund managers, like:
- HDFC Pension
- SBI Pension
- ICICI Prudential
- UTI Retirement, etc.
You can compare their returns and switch once a year.
4. Dual Accounts – Tier I and Tier II
- Tier I (mandatory): Locked till 60 years (partial withdrawal allowed).
- Tier II (optional): Works like a savings account, withdraw anytime.
Both give returns based on asset mix and manager performance.
Historical Returns (Approximate 5-Year Average)
| Asset Class | Average Return Range |
|---|---|
| Equity (E) | 9% – 12% |
| Corporate (C) | 8% – 10% |
| G-Sec (G) | 7% – 9% |
These returns beat traditional options like PPF or FDs in the long run.
Example of NPS Returns
You invest ₹5,000/month = ₹60,000/year
After 30 years, at 10% average return, your corpus = ₹1.1+ crore
Out of this:
Benefits of NPS Returns
| Benefit | Why It’s Good |
|---|---|
| Higher than FDs/PPF | Market-linked returns over long term |
| Tax advantages | Extra ₹50,000 under Section 80CCD(1B) |
| Multiple asset choices | Customize for risk or safety |
| Low charges | Among the lowest fund management fees (~0.01%) |
| Transparent performance | Returns updated daily on NPS portal |
How to Check NPS Returns
- Visit https://www.npstrust.org.in/return-of-nps-schemes
- Select your Tier, Fund Manager, and Asset Class
- See 1-year, 3-year, 5-year, and since inception performance
