Compelling reasons to invest in NPS. Read them in this blog. 

When it comes to securing your future post-retirement, the National Pension System (NPS) stands out as a reliable and tax-efficient investment option. The National Pension System, also known as the National Pension Scheme, is one of the most efficient investment systems for retirement planning, long-term wealth creation, and tax saving.  

In this blog, we’ll explore the compelling reasons to invest in NPS, understand the NPS investment limit and its tax benefits. 

The National Pension System – Synopsis 

NPS is a government-backed retirement savings scheme available to all Indian citizens between 18 and 70 years of age. It encourages a systematic investment approach and invests in equities, corporate bonds, government securities, and AIFs. This makes this scheme a balanced and diversified long-term savings instrument. 

Why should you invest in NPS? 

1. Attractive Tax Benefits: This is one of the strongest reasons to invest in NPS. An NPS subscriber can avail up to a ₹1.5 lakh tax benefit under Section 80 (C) of the Income Tax. An additional benefit of ₹50,000 under Section 80CCD (1B) is also available exclusively for NPS contributions, making the total tax savings up to ₹2 lakh per year. 
2. Flexible Investment Options: NPS provides dynamic asset allocation. You can select your asset allocation through the ‘Active’ choice or let the system manage it based on your profile, age, and investment horizon through ‘Auto’ mode. 
3. Low-cost Investment Option: Compared to other investment schemes, the NPS fund management fees are among the lowest, which means more of your money is invested and gets the benefit of compounding over time. 
4. Smart Retirement Planning: NPS subscribers can use the NPS investment calculator to estimate their retirement corpus. They can visualize how much wealth they could accumulate over time by entering their age, contribution amount, and expected returns. 
5. Start with ₹500: Any Indian citizen can open an NPS Tier II account with ₹500 only. Moreover, a subscriber’s change in location, place, or job doesn’t affect their returns and contributions. 

Why is NPS a good investment option? 

The National Pension System is ideal for: 

• Long-term investors planning for retirement. 
• Subscribers looking to save tax while investing. 
• Salaried professionals who look for reliable retirement options. 

Click here to learn how the NPS calculator helps you to get closer to your retirement dreams. 

Final Thoughts

Whether you are just starting your financial journey or looking to generate a financial corpus for your retirement, the NPS scheme offers compelling reasons, such as tax savings, long-term returns, and, moreover, peace of mind.