NPS: This pension fund manager gave the highest return of 26% in past one year. Check the list here

The National Pension System (NPS) is a retirement savings scheme that is mandatory for government employees and optional for those in the private sector. It also offers tax benefits of up to ₹2 lakh under section 80CCD(1) and 80CCD (1B) of the Income Tax Act, 1961. 

One has to be a resident or non-resident Indian between the ages of 18 and 70 years to open an NPS account.

NPS portfolio invests in an entire spectrum of assets including equity, government bonds, corporate bonds and alternative investment funds. Here, we list out the returns delivered by equity assets in the past one year.

NPS accounts are of two kinds: Tier I and Tier II. 

Tier-I account

An NPS Tier-1 account is the basic NPS account. If you want to subscribe to NPS, you must first open a Tier-1 account. It is a long-term account meant for retirement planning through market-linked returns.

One must invest a minimum of ₹500 to open a Tier-1 account and at least ₹1,000 per year to maintain it.

The highest one-year-return of 26.51 per cent was posted by DSP Pension Fund Managers while the lowest was given by LIC Pension Fund, as the table below shows.

(Source: npstrust.org.in, returns as on Jan 2, 2025)

Tier-II

An NPS Tier-2 account is an add-on account which you can open only if you have an NPS Tier-1 account. It offers more flexibility than a Tier-1 account allowing you to make withdrawals as and when required. Check its salient features below:

While ₹1,000 is the minimum amount required to open this account, you don’t have to maintain a minimum annual financial contribution.

This is a major difference from the NPS Tier-1 account. Moreover, there is no maximum limit for contributions to this account.

A Permanent Retirement Account Number (PRAN) is a must-have to open a Tier-2 account.

(Source: npstrust.org.in, returns as on Jan 2, 2025)

The highest return of 23.27 per cent was posted by DSP Pension Fund Managers while the lowest of 15.49 per cent was given by LIC Pension Fund, the table above reveals.

As the table above shows, Tier-II accounts have very small asset sizes. This is primarily because they are add-on accounts to Tier-I accounts.

There are five pension fund managers with assets under ₹100 crore, with two having assets under ₹10 crore.

Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment-related decision.