Tier II account of National Pension System (NPS) has outperformed most fixed income investments. With 11.11% returns in the last one year, Scheme G of NPS Tier II has outperformed liquid debt mutual funds and savings bank fixed deposits by a wide margin. Liquid funds on an average have delivered around 5% in the last one year. Savings bank fixed deposits have also come down steeply to around 5%. SBI FDs of 180 days to less than one year fetch 4.4%. Deposits with maturity between 1 year and up to less than 2 years will give 4.9%.
In the last three years, NPS Tier II account has given annualised return of 9.53% and in the last five years, average returns stood at 10.20%.
NPS Tier II Account Scheme G invests in government bonds and related instruments. NPS Tier II is a voluntary account. Those who have an existing NPS Tier I account can open Tier II Account. You can invest and redeem from Tier II Account at your discretion provided you are not a Central Government employee claiming deduction under Section 80C for your contributions to Tier II Account.
A Central Government employee who invests in NPS Tier II Account can avail deduction under Section 80C maximum for an amount up to Rs1.50 lakh. Such accounts will have a lock-in period of three years.
Here’s how the different pension fund managers performed under NPS Tier II account:
NPS Tier II account manages assets worth ₹610 crore under Scheme G. NPS Tier II Account allows four investment options -equities, corporate bonds, government bonds and alternate investments.
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