September 27, 2010 12:21 am
I would like to know weather NPS is better than EPF account in terms of pension as well as investment in future. If I have the option to invest in NPS or EPF than which one should I choose?
I would go for NPS if not mandatory to be in EPF. first, I dont like the opaque EPF management where even to know my a/c balance much hurdles are there, let’s forget the time for transferring a/c if you switch job.
Another thing as mentioned in above comments, participation in Equities for longer duration will outperform all other means of investment so NPS is superior in this front. Private players are managing NPS and even you have choice to change your provider if not satisfy with one. EPF lacks such things and score less than NPS. I hope moving forward we should have an option to opt for one from NPS and EPF.
I think NPS is a good option over a longer period of time. Incase of EPF you will get fixed returns, for the next year it would be 9.5%, however it was 8% for the last 4 years. Whereas incase of NPS you have a choice to invest 50% in equity. Equity have always given good returns over a longer period of time.
So if you are willing to take some risks split your investments into equity and debt. You should atleast get 12-15% returns in the long term.
EPF had 8.5% interest rate in the last 4 yrs , not 8% . 8% is on PPF
NPS offers 2 options.
A – 100% debt, will give you stable but less return
B – 50% equity & 50% debt – the returns are not fixed but can offer good returns over a period of time.
You take your own decision now.
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