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The prospect of retirement can be daunting for many employees, but it is important to approach it with a proactive and informed mindset, focusing on financial planning. With correct planning and the right investment, there is nothing to be anxious about. Index Fund Corner Sponsored Scheme Name 1-Year Return Invest Now Fund Category Expense Ratio Axis Nifty 50 Index Fund +32.
80% Invest Now Equity: Large Cap 0.12% Axis Nifty 100 Index Fund +38.59% Invest Now Equity: Large Cap 0.
21% Axis Nifty Next 50 Index Fund +71.83% Invest Now Equity: Large Cap 0.25% Axis Nifty 500 Index Fund -- Invest Now Equity: Flexi Cap 0.
10% Axis Nifty Midcap 50 Index Fund +46.03% Invest Now Equity: Mid Cap 0.28% There is a diverse range of retirement schemes and pension plans available to invest in the market.
Among them, two popular schemes are the Public Provident Fund and the National Pension Scheme. What is the National Pension System (NPS)? The National Pension System (NPS) is a government-backed retirement program that allows people to earn significant returns from their investments over the long term. This market-linked scheme is open to all employees across public, private, and unorganised sectors (except for the armed forces).
Under this scheme, individuals can invest in a pension account regularly throughout their employment. At retirement, a portion of the accumulated funds can be taken as a lump-sum payment, while the remaining is used to obtain a regular pension. There are two types of NPS accounts: Tier I, which is not withdrawable until the age of 60, and Tier II, a voluntary savings account from which money can be taken at any time.
What is the Public Provident Fund (PPF)? The Public Provident Fund (PPF), is another retirement savings scheme backed by the government that provides guaranteed returns on your investment through compound interest. Introduced in 1968 by the National Savings Institute, this investment tool enables individuals to build up retirement funds while simultaneously minimising annual taxes. This long-term saving option is available in banks and post offices and comes with a 15-year lock-in period.
NPS vs PPF People must continue to be invested in NPS until they reach the age of 60, and the accounts can be maintained until the age of 70. The maturity/lock-in term for a PPF account is 15 years, which can be extended in 5-year blocks. Partial withdrawals are permitted after the sixth year of investing (according to bank policy).
NPS balances released at maturity are tax-free, whereas annuity must be acquired after paying taxes. PPF is within the EEE (exempt-exempt-exempt) category. The minimum age for investing in NPS is 18, and the maximum age to enroll is 65, whereas under PPF, there is no age limit, and even minors with a guardian can also invest.
Under NPS, the minimum investment amount is ₹ 1,000 for Tier I and ₹ 250 for Tier II, while it is ₹ 500 for PPF accounts. The maximum investment amount under PPF is ₹ 1.5 lakh per year, while there is no maximum limit under NPS, but the contribution should not exceed 10% of your salary or gross total income.
NPS and PPF both have a lock-in period, although investors can make partial withdrawals. After three years, NPS allows for partial withdrawals from the account. You can seek withdrawals of up to 25% of your total contributions, but only for certain reasons, including supporting a child's further education or marriage, etc.
PPF, on the other hand, allows for partial withdrawals, but only after the seventh year. A full withdrawal is not authorized from a PPF account. You may withdraw up to 50% of your balance at the end of the fourth prior year or the end of the preceding year, whichever is less.
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