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bivocalbirds · 3 years

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How to invest money in your 20s in India

1. Mutual Funds

Mutual Funds are money that is pooled together by many investors and managed professionally by a fund manager. It's a trust that collects money on behalf of investors who share a common investment goal. The money can be invested in equities or bonds, as well as other financial instruments. Each investor owns a percentage of the fund's total assets.

Mutual funds can be a great investment option for early-stage investors, as they are easy and affordable to research and purchase. Most mutual funds require a minimum lump-sum investment of Rs. 1000 to Rs. Investors can invest as little as Rs. These funds allow investors to start a SIP for as low as Rs.100 each month. High-risk Mutual funds can offer annualized returns up to 30-35%. Section 80C allows mutual funds to be exempt from tax.

These are the top Mutual Funds that you can invest in.

ICICI Prudential Focused Bluechip Equity Fund

Aditya Birla Sun Life Small & Midcap Fund

Tata Equity PE Fund

HDFC Monthly Income Plan- MTP

L&T Tax Advantage Fund

2. Life Insurance Policies

The younger and more healthy you are, the less expensive life insurance will be. Because you get older, your chances of developing health problems that can increase the cost or make you uninsurable are higher. Life insurance policies are essential in your 20s.

Life insurance can be a smart financial decision. It provides a safety net for your loved one and beneficiaries in the event of your death. Your family might be dependent on your income, and you may have large educational loan debts. Your premium will not change if you purchase a policy for more than 30 years when you are still in your 20s. If you wait 15 years, your premium will increase. It is a good idea to buy insurance policies as soon as possible. You should have the following insurance plans in your portfolio:

Life insurance

Health Insurance

Personal accident/Disability coverage

Financial experts recommend against investing in Life Insurance policies as they have had poor returns.

3. Shares/ETFs

Simply put, investing in shares is like investing in businesses. You buy shares in a company and invest your money in its business. In return, the company pays dividends. Your investment in the company will increase as the company performs well.

Your 20s is a great age to learn about the share market and how you can invest in shares of different companies. Although the stock market can be volatile, it is crucial to identify the best companies to invest in. This is done by performing fundamental analysis as well as technical analysis of the company’s share price over time.

The right company can be very profitable over the long-term if you invest in it. For example, if 1 Lakh INR was invested in HAVELLS shares back in 2005, it would have grown 100x to 1 Crore by 2021. This is why it's important to invest in the right stocks in order to get more returns.

ETFs, also known as Exchange Traded Funds, are security products that track an Index sector or commodity. However, they can be bought or sold on the same stock exchange as regular stocks. NIFTY 50, a benchmark Indian stock exchange index, is the weighted average 50 largest Indian companies that are listed on the National Stock Exchange. These indexes can be invested in just like shares of any other company. Indexes are used to measure the performance of a particular sector, commodity, or asset and therefore are less risky than investing in shares.

4. Purchasing a House/ Investing in Real Estate

Buying a house is probably the biggest life goal for Indians between the ages group 22 to 45. A 2019 survey by Aspiration Index found that Indians aged 22 to 45 consider buying a house and saving money for their children's education to be the top long-term goals. A house is a good investment choice. A home is the most tangible asset that you can invest in, given India's obsession with tangible assets. Owning a home has the obvious financial advantage of price appreciation, which builds home equity. A home purchase can also bring tax benefits. Section 24 of the I-T Act allows interest deductions up to Rs 2 Lakh, which includes 1/5th interest earned during construction.

Although buying a home in your early years of working life can seem overwhelming, as you may not have sufficient capital to make a downpayment on a house during this time, it is possible to save enough money in your late 20s and start saving up for the down payment so that you can consider purchasing a house.

5. Fixed Deposits (FDs) and Recurring Deposits

Fixed deposits are a great way to increase savings while maintaining maximum safety. You can make a lump sum deposit with your bank/financier, and then choose the tenure that suits you best. The tenure ends and the deposit earns interest for the duration of the term at the rate you have set.

Like an emergency fund, it is always a good idea to have a short-term savings plan. You can keep an RD for 6 months to one year, which will ensure you have enough cash on hand. Many banks offer interest rates between 6% and 7%.

If you are looking for low-risk investment options that offer both security and liquidity, FDs or RDs can be a good option. You can begin investing in these instruments as early as your 20s.

6. Investing in Precious metals – Gold/Silver

India's people love to invest in precious metals such as Gold and Silver because they are a sought-after commodity for centuries. The rare and highly liquid asset of gold is unique. It is used to hedge currency risk and protect against inflation losses. Gold is a better investment than Silver because Silver prices are constantly under the shadow of the Gold market.

Let's compare the prices of 10 grams of Gold back in 2000 and 2021 to put the situation in perspective. The price for 10g of 24K gold in 2000 was as low as 4400 INR. In 2021, the price is almost 50,000 INR. This represents a gain of 1036% over 21 years (CAGR 12.27%). You can see that Gold is a smarter investment option than fixed deposits in Banks (7%) and low-risk mutual funds (8-10%).

If you are looking for an investment that is safe, liquid and offers decent annual returns, then Gold can be considered. Investing in Gold comes with storage risks and theft risks. Therefore, one should be careful and plan for safety and storage before investing.

7. PPFs

The central government has created the PPFs, a long-term retirement savings scheme that currently offers 7.6% interest per year. It is best to start investing at the beginning of FY (beginning at Rs. To reap maximum benefits, you should invest between 500 and 1.5 lakhs. It can be extended in five-year increments after maturity. All interest, capital, and proceeds are exempt from tax (also known as EEE benefits).

If you don't want to take greater risks with your savings, but still wish to invest for tax benefits and average returns, PPFs might be a good option.

8. Cryptocurrencies

Cryptocurrencies are a popular, but risky, investment option that is gaining popularity. Cryptocurrencies can offer higher returns over a shorter period of time. BITCOIN is becoming a popular buzzword and investors are increasingly interested in investing in it.

Cryptocurrencies are digital currencies that use cryptography to protect their privacy and security. Blockchain technology is the basis of security. It is simply a shared digital ledger that is linked in blocks and then made available to the public in a shared network. Due to the complexity of interbank transactions globally, exchange rates must be considered. This can lead to higher transaction costs. Because they accept the same rate globally, cryptocurrencies solve the problem and allow transactions to be completed much quicker than the existing process. Cryptocurrencies will be used to make transactions quicker and easier for larger businesses as well as people who need to travel frequently to other countries.

It is important to learn about the various projects and understand the importance of cryptocurrency before you decide to invest. Bitcoin is the most widely used cryptocurrency and has the highest market capitalization. Ethereum and Binance Coin are close behind.

The 20-year-olds are the most risk-averse and have some money after other investments. Keep in mind that cryptocurrency prices can fluctuate and one should only put money that they are willing to risk in the event that things don't go according to plan.

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quikkloan · 4 years

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How to Save Income Tax in India?

When it comes to income tax, people view it as a financial burden and lack of knowledge about tax-planning adds to the stress. A majority of the taxpayers in the country struggle hard to find a perfect tax-saving scheme to reap the benefits. Understand your risk appetite first and then look for a scheme that suits your needs. There are a host of legitimate ways of saving tax under the Income Tax Act, 1961. Whether you are a salaried individual or an entrepreneur or whether you make a rental income, or earn an income from your investments, you have to pay taxes to the government. To help you in this regard, Section 80C, 80D, 80E and 80G of the Income Tax Act list the ways you can save on taxes. These include: Tax saving Mutual Funds (ELSS), Fixed Deposit, Public Provident Fund, National Pension System, National Saving Certificate, Health Insurance Premiums, Senior Citizen Savings Scheme, Sukanya Samriddhi Yojana, Home Loan Repayment and Tuition Fee Payment under section 80C of the Income Tax Act: Tax Deductions up to Rs.1.5 lakh Medical Insurance Premiums under Section 80D of the Income Tax Act: Tax Deductions up to Rs.1lakh Interest paid on Home Loans taken by first-time borrowers Under Section 80EE of the Income Tax Act:Tax Deductions up to Rs.50,000. Also, interest paid on education loan for higher education:No limit is set Donations made to Charitable Organizations under Section 80G of the Income Tax Act: For donations above ₹2,000 to qualify as a tax deduction, the contribution has to be made using other modes of payment. The various contributions are eligible for a deduction of up to either 100% or 50%, with or without restriction, under Section 80G. A House Rent Allowance (HRA) as a component of your salary under Section 80GG of the Income Tax Act: Tax Deductions up to Rs.60,000 The interest earned on a savings bank account under Section 80TTA of the Income Tax Act:Tax Deductions up to Rs.10,000 Different-abled individuals or a family member with a disability to claim tax benefits under Section 80DD of the Income Tax Act: Tax Deductions up to Rs.1,25,000 Deductions on medical expenses incurred to treat specific ailments Under Section 80DDB of the Income Tax Act: Tax Deductions up to Rs.1lakh Individuals who have been certified to be at least 40% disabled by relevant medical authorities according to government rules under Section 80U of the Income Tax Act: Tax Deductions up to Rs.1,25,000 Individuals to claim tax deductions on contributions made to political parties registered under Section 29A of the Representation of the People Act, 1951 and electoral trusts under Section 80GGC of the Income Tax Act:100% of your contribution is eligible to qualify as a deduction Read Also - How to File Income Tax Return

Save Up to Rs.1.5 lakh Under Section 80C of the Income Tax Act

Section 80C of the Income Tax allows you to save up to Rs.1.5 lakh, maximum amongst all tax saving schemes. So, let’s know more about the same in this post.

Best Tax Savings Investments Under Section 80C at a Glance

Investment SchemesReturnsLock-in PeriodTax Saver Fixed Deposit6%-7%5 YearsEquity Linked Savings Scheme FundsVary from Fund to Fund3 YearsPublic Provident Fund7%-8%15 YearsNational Saving Certificate7%-8%5 YearsNational Pension System12%-14%Till RetirementSenior Citizen Savings Scheme8.7%5 YearsEmployee Provident Fund8.50%It can be closed while quitting job permanently. It can be transferred while changing companies till retirement.Home Loan RepaymentNAThere is no lock-in period in a home loan. Usually, a home loan can be availed for 30 yearsPayment of Tuition FeesNANASukanya Samriddhi Yojana8.5%NA

How to Save Income Tax in India: All You Need to Know

Tax Saver Fixed Deposits: 5-year tax-saver FDs allow you to claim a deduction of up to Rs.1.5 lakh. These deposits have a fixed rate of interest, currently between 7%-8%. The Interest portion on FDs is taxable. Equity Linked Savings Scheme Funds: ELSS is a type of mutual fund, which invests a minimum of 80% in equity funds. These mutual funds come with a 3-year lock-in period with returns subject to Long term Capital Gains Tax at 10% with an exemption limit of Rs.1 lakh. Public Provident Fund: PPF is a government-linked savings scheme with a lock-in period of 15 years. It can easily be availed at many banks and post offices in India, giving tax benefits of up to Rs.1.5 lakh on the Interest. National Saving Certificate: NSC is launched by the government, primarily used for small as well as income tax savings. It comes with two fixed maturity periods, i.e 5 years and 10 years along with a fixed rate of interest. It can easily be opened in a post office with an Interest portion of giving the tax benefit of up to Rs.1.5 lakh. National Pension System: It is a defined contribution pension system in which the contributions are invested in a mix of assets and the retirement corpus is dependent on the returns from those assets. Under NPS, an investor can open two accounts-Tier l and Tier ll. On turning 60, an investor can exit from the NPS but 40% of the pension wealth has to be utilised for the purchase of an annuity. This deduction is available under Section 80CCD up to Rs 1.5 lakh for contributions to NPS. Senior Citizen Savings Scheme: It is a popular small savings scheme meant for senior citizens. It has a maturity period of 5 years and helps in earning a regular income in retirement year. Any number of accounts can be opened in any post office subject to a maximum investment limit of Rs.15 lakh by adding balance in all accounts. The account can be extended for 3 years after maturity. Contribution to the SCSS is tax deductible up to Rs 1.5 lakh. Employee Provident Fund: Under the Employee Provident Fund Act, 12% of the pay of employees in the organised sector is deducted towards the Employees Provident Fund. This deduction counts towards the Rs 1.5 lakh limit under Section 80C of the Income Tax Act. Home Loan Repayment: If you have taken a home loan, the part of EMI that goes towards repaying the principal amount is eligible for tax deductions. The amount you pay as interest does not qualify for tax deductions in this section. Payment of Tuition Fees: You can claim tax deductions up to ₹1.5 lakh on tuition fees paid for your child's education. This benefit is only available to individual parents or guardians and a maximum of two children per individual. The deduction does not depend on the class of the child. However, it must be a full-time education course in an Indian school, college or university. Parents of adopted children, unmarried individuals and divorced parents can also claim these benefits. Sukanya Samriddhi Yojana: Parents of a girl child below the age of 10 can get this deduction. This account has a tenure of 21 years or until the girl marries after turning 18. The investments made on the Principal for this scheme are eligible for tax deduction up to Rs.1.5 lakh. Now that you know about the tax savings schemes, it is also important for you to know your risk appetite and then plan your finances for maximum tax benefits. Here are a few recommendations based on your risk appetite: High Risk Appetite: If you are an aggressive investor and are looking for high returns along with tax benefits under Section 80C, you can consider investing a total of Rs.1.5 lakh per year in ELSS. It is a tax saving mutual fund that has the potential to offer double-digit returns. In other words, you can avail tax benefits in the short-term and earn good returns in the long-term. Medium Risk Appetite: If you have a moderate risk appetite, you can invest a portion of your money in ELSS and the rest in Public Provident Fund (PPF) and/or tax-saving fixed deposits. This strategy gives you the required tax benefits under Section 80C and also helps you balance your risk and returns. Low Risk Appetite: If you are totally risk-averse, you can invest in tax saving fixed deposits or PPF. Here, you can avail the tax deductions of Rs.1.5 lakh under Section 80C and the risk exposure on these avenues is minimal. However, these avenues offer fixed returns, the rate of return can be quite low (just between 6-8%). This can be a problem if you take inflation into consideration. How to Apply for Tax Saving Schemes You can anytime open the account either in a bank branch or post office. Almost every bank and post office in the country offers these tax saving schemes. Just check your eligibility and bring all the required documents to apply easily for these tax savings schemes. Eligibility Criteria and Documents Required of Tax Saving Schemes Tax Saving SchemesEligibility CriteriaDocuments RequiredTax Saver Fixed Deposits-Residents -Hindu undivided families Identity Proof: -Passport PAN card -Voter ID card -Driving licence -Government ID card - Senior citizen ID card Address Proof: -Passport -Telephone bill -Electricity bill -Bank Statement with ChequeCertificate/ ID card issued by Post office Equity Linked Savings Scheme Funds- Residents - Hindu undivided familiesKYC DocumentsPublic Provident FundAny Indian Citizen -Identity Proof -Address Proof -PAN Card -Aadhaar Card -Passport Size Photographs -Pay-in-Slip (available at bank branch/post office) Nomination FormNational Saving Certificate- The individual must be an Indian citizen. - There is no age limit for individuals in order to purchase a certificate. - Non-resident Indians cannot invest in NSC. - Investments can be made with another adult or individuals can buy an NSC on behalf of a minor.Identity Proof: -Passport -Permanent Account Number (PAN) Card, -Voter ID -Driving licence -Senior Citizen ID or Government ID for verification. Address Proof: -Passport, -Telephone bill, -Electricity bill -Bank statement along with a cheque as well as a Certificate or an ID card that has been issued by the Post OfficeThe investor must submit a photograph. -NSC Application FormNational Pension SystemAny citizen of India between the age of 18 to 65 can open NPS account by visiting any POP-SPIdentity Proof: Passport, Aadhaar Card, Ration Card , Voter ID , Driving Licence, Utility Bills Address Proof: Passport, Aadhaar Card, Ration Card , Voter ID , Driving Licence, Utility Bills Senior Citizen Savings Scheme- An individual who has attained the age of 60 years or above at the time of opening an SCSS account.Individuals who have attained the age of 55 years old, but are below the age of 60 years old and have retired on superannuation are eligible to open an SCSS account. - Individuals who have attained the age of 55 years old and have retired before the implementation of the SCSS rules are eligible under the scheme. - Under the SCSS, retired Defence Services personnel are eligible irrespective of their age. However, certain other specific conditions must be met by these individuals Two passport-size photographsForm A must be completely filled and submitted Identity Proof: Passport or Permanent Account Number (PAN) Card must be submitted Address Proof: Aadhaar Card or telephone bill Age Proof: PAN Card, Voter ID, Birth Certificate, Senior Citizen Card, or PassportEmployee Provident Fund- Indian citizens are eligible to open a PPF account. - An individual can open only one account under his/her name. -However, another account can be opened by the individual on behalf of a minor. Identity Proof Address Proof PAN Card Aadhaar Card Passport Size Photographs Pay-in-Slip (available at bank branch/post office) Nomination Form Home Loan Repayment- Any Salaried or self-employed Individual aged between 21-65 years - Minimum income should be Rs.1,80,000 per annum - An applicant should have 2-3 years of current job or business stability experience Filled home loan application form Identity Proof: Aadhaar Card/ Passport /PAN Card/ Voter ID Card /Driving License Address Proof: Passport/Aadhaar Card /Utility Bill Residence Ownership Proof: Property Documents/Maintenance Bill/Electricity Bill Income Proof: Latest 3 months Salary Slips and Form 16 OR Latest 3 years Income Tax Returns including Computation of Income, Profit and Loss Account, Balance Sheet, Audit Report, etc. Business Existence Proof: 3 years old Saral Copy /Shop Establishment Act /Any Tax Registration Copy /Company Registration license Job Continuity Proof: Current Employment Certificate /Current Job Appointment letter (if more than 2 years)/Experience Certificate (including your previous job certificate or appointment and relieving letter) Bank Statements: Latest 1 year statement where your salary is getting credited Property Documents: Copy of agreement executed / Sale Deed, Share Certificate, Latest Maintenance Bill, List of documents & sanction letter given by Existing Banker (If applicable) Investment Proof: FixedDeposit/Shares/Fixed Assets, etc.Advance Processing ChequePassport size photograph/sPayment of Tuition FeesAny Indian citizen School Fee receipt for the entire year Filled in Form 12BB to their employer (salaried)Sukanya Samriddhi Yojana- Only girl children are eligible to hold the Sukanya Samriddhi account. - The maximum age of a girl child should not be more than 10 years. - Proof of age of the girl child needs to be attached. Parents and legal guardians are eligible to open the Sukanya Samriddhi account on behalf of their children. - One legal guardian/parent is eligible to open a maximum two accounts.- Sukanya Samriddhi Yojana Account Opening Form - Birth certificate of the girl child (account beneficiary) - Identity proof of the depositor (parent or legal guardian), i.e., PAN card, ration card, driving licence, passport. - Address proof of the depositor (parent or legal guardian), i.e., passport, ration card, electricity bill, telephone bill, driving licence. Read the full article

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ainvestops · 4 years

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short term investment: My PPF account will mature on March 31. Where can I invest this money for the short term?

I am 68 and still working. I have some investments in bank FDs and mutual funds that can take care of my expenditure after retirement. My PPF account is maturing on 31 March, with a corpus of Rs 25 lakh. I have already extended the tenure of my PPF account for two five-year terms. What are the short term options for this maturity value? Prableen Bajpai, Founder, Managing Partner, FinFix Research & Analytics, responds: You have not mentioned any financial goal or time frame. Going with a shortterm period, between 3 months and a year, capital preservation becomes the prime component of any investment decision. There are few choices such as Post Office Time Deposits or debt mutual funds other than bank FDs. A one-year time deposit at the post office will earn 6.9%, calculated quarterly and paid annually. The minimum lock-in is 6 months. However, in the event of an exit between 6 and 12 months, only the post office saving account’s interest rate will be payable. The second option is to go for an ultra-short-term or low duration debt fund. These funds can be accessed anytime, but the gains are not fixed. If you choose debt funds, split the amount across two credible fund houses. If you do not utilise the money held in debt funds for 3 years, you can avail indexation on capital gains. If some of the money can be parked for say 5 years, then the Senior Citizen Saving Scheme is a viable alternative. You can invest a maximum of Rs 15 lakh and earn a quarterly interest payout at 8.6%. A mix of these products should suffice your purpose.

I am a 46-year-old professor. Recently, I changed jobs and received Rs 15 lakh from my previous employer as gratuity and leave encashment proceeds. I have two children aged 16 and 13. I want to keep this money for their higher education. How should I invest it? I have been investing Rs 40,000 a month in mutual funds through SIPs for the last three years.

Jayant R. Pai CFP and Head – Products, PPFAS Mutual Fund, responds: As you are already investing Rs 40,000 a month in equity funds, you are on the right track. You could increase the SIP amount in the schemes you already invest in. Assuming you need the money when your children turn 21, your investment horizon is 5 and 8 years respectively. Segregate the portfolio for each child. Invest the sum received from your ex-employer in liquid funds of the same fund houses and opt for the STP option. This will help you sequester the funds.

I am 64, retired with no pension. I live off my savings and investments. I have Rs 1.3 crore in mutual funds, Rs 15 lakh in bank FDs, Rs 15 lakh in SCSS, Rs 9 lakh in post office deposits and Rs 10 lakh in the PPF. As part of my MF portfolio, I invested Rs 75 lakh in the dividend options of three hybrid funds: DSP Equity and Bond, ICICI Prudential Equity and Debt and Tata Hybrid Equity Fund. I earn about Rs 58,000 from these every month. Should I opt for an SWP option instead to earn around Rs 65,000 every month? I want to protect capital too. Ankur Choudhary, Co-Founder and CIO, Goalwise, responds: All three are aggressive hybrid funds, which means these will have 65-80% of their portfolio invested in the market. In the long term this means you can get higher returns but on the flip side you could also lose 30-40% of your investments in a market crash. If you want Rs 65,000 every month then it is best if you set up a SWP since dividends are not fixed. Also, SWPs may be more tax efficient as you would be paying capital gains tax, that too only on the gains part of the amount withdrawn. The new financial year dividends will be taxable at your bracket and there will be a TDS of 10%.

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boldlykeenblizzard · 4 years

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short term investment: My PPF account will mature on March 31. Where can I invest this money for the short term?

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investglobal · 4 years

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short term investment: My PPF account will mature on March 31. Where can I invest this money for the short term?

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bloggermotion-blog · 5 years

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BEST NPS FUNDS IN INDIA – KNOW THE BEST PERFORMER

Best NPS funds are performing well in the last 5-10 years and giving up to 12% annualized returns. Some of these National Pension Scheme Funds have provided 21% returns in the last year. Hence, these are attracting investors now. While NPS funds are providing good returns, these also provide income tax benefits u/s 80C.

What is the National Pension Scheme (NPS)?

National Pension Scheme is a government pension scheme for Indian citizens in the age group of 18 to 60 years. Apart from Central and State Government employees, other investors too can subscribe to this New Pension Scheme/ National Pension Scheme.

It has 3 asset classes

Equity plans (Class E) – Which invests majorly in equity-related instruments. This is a high risk-high return option. Good for high-risk investors.

Govt bond plans (Class G) – This NPS fund invests in Govt securities like govt bonds, etc., This provides high safety to the investments. It is a low risk-low return option. Good for low-risk investors.

Corporate bond plans (Class C) – Which invests in securities other than govt securities like investing in corporate bonds, corporate securities etc. This is high risk-medium return option. Good for moderate to high-risk investors.

Must Read –

TOP 10 PENSION PLANS IN INDIA BEST FOR RETIREMENT LIFE

What are the accounts available under NPS?

There are 2 types of accounts are there as part of the National Pension Scheme. Tier-I account and Tier-II account.

Tier-I NPS account – Investments can be made into this account, however, it has restriction in terms of withdrawal of the funds from this account.

Tier-II NPS account – Investments can be made into this account without any restrictions on the withdrawal of the funds from this account.

Apart from above, there is a New Scheme “ Swavalamban NPS scheme” / NPS Lite for Govt. Employees.

Must Read –

NPS CONTRIBUTION – LATEST RULES AND UPDATES

What are income tax benefits available for investments made in NPS?

Here are the details of the income tax benefits of the investments made in this

1) Income Tax Benefits for investments in Tier-1 NPS account

Any investments made in the Tier-1 NPS account are eligible for income tax rebate up to Rs 1.5 Lakhs u/s 80CCD (1) of the Income-tax act.

Any investments made in the Tier-1 NPS account are eligible for an income tax rebate up to Rs 50,000 u/s 80CCD (1B) of the Income-tax act. This is over and above Rs, 1.5 Lakhs indicated above.

Means you can simply invest up to Rs 2 Lakhs in NPS scheme of Tier-1 and get a complete income tax benefit. Alternatively, you can invest in other tax saving investment options u/s 80C up to Rs 1.5 Lakhs and invest Rs 50,000 in an NPS Tier-1 scheme and get tax exemption u/s 80CCD (1B).

If an employer has contributed to this fund, the employee can claim this as income tax exemption u/s 80CCD (2) of IT act. This is applicable to salaried employees only. The least of the following can be claimed as income tax exemption 1) Actual contribution by the employer to NPS fund 2) 10% of basic+DA (15% for Central Govt employees) 3) Gross total income of the employee.

Income Tax Benefits for investments in Tier-2 NPS account

There are no income tax benefits for contributions made in Tier-2 of NPS account.

However, Central Govt employees can get income tax benefits for amounts invested in Tier-2 account w.e.f. 1-April-2019 which is optional.

However, if they are claiming this as a tax benefit, the amount would be locked and not eligible for withdrawals for 3 years.

Must Read –

NPS SCHEME LATEST NEWS – PREFERENCE CHANGE IN TIER I

Best NPS Funds in India – best performer

Now analyze some of the Best Funds to invest in 2019. We have classified these NPS funds based on the plans available.

Central Government Plan NPS Funds – This fund is only for central government employees.

State Government Plans NPS Funds- This fund is only for only state government employees.

Swavalamban Plans – NPS Lite

Equity Plans – NPS Funds Tier

Govt Bond Plans – NPS Funds Tier-I

Corporate Debt Plans – NPS Funds Tier-I

Equity Plans – NPS Funds Tier-II

Govt Bond Plans – NPS Funds Tier-II

Corporate Debt Plans – NPS Funds Tier-II

Central Government Plans

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Best NPS Funds in 2019

There are only 3 fund managers offering this for Central Government Employees i.e. SBI, UTI and LIC.

The SBI Pension Fund is the best fund in this category. This fund generated 10.44% annualized returns in the last 5 years and 13.54% returns in the last 1 year. If one would have invested Rs 5,000 per month through SIP for 5 years, the investment amount would have been Rs 3 Lakhs (5,000 x 60) and your fund value would have grown to Rs 3.82 Lakhs.

In the short term of 1 year, the SBI Pension Fund and LIC Pension Fund have given good returns along.

Next, it is the list of Funds under Central Govt Plans and their performance.

State Government Plans

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Best NPS Funds in 2019

Here too, there are only 3 fund managers offering for State Government Employees i.e. SBI, UTI and LIC.

The SBI Pension Fund is the best fund in this category. This fund generated 10.51% annualized returns in the last 5 years and 13.63% returns in the last 1 year. If one would have invested Rs 5,000 per month through SIP for 5 years, the investment amount would have been Rs 3 Lakhs (5,000 x 60) and your fund value would have grown to Rs 3.82 Lakhs.

In the short term of 1 year, along with the SBI Pension Fund and LIC Pension Fund have given good returns for 1 year.

Next, it is the list of Funds under State Govt Plans and their performance

Swavalamban Plans

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Best NPS Funds in 2019 NPS Lite

There are 4 fund managers offering fund for Government Employees under NPS Lite i.e. SBI, UTI, LIC and Kotak.

SBI Pension Fund is the best fund in this category. This fund generated 10.42% annualized returns in the last 5 years and 13.34% returns in the last 1 year. If one would have invested Rs 5,000 per month through SIP for 5 years, the investment amount would have been Rs 3 Lakhs (5,000 x 60) and your fund value would have grown to Rs 3.82 Lakhs.

In the short term, along with the LIC Pension Fund and SBI Pension Fund have given good returns for 1 year.

Next is the list of Funds in NPS Lite (Swavalamban) Plans and their performance.

Equity Plans

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Best NPS Funds in 2019 from Tier-I

Here is the performance of Funds under this category.

HDFC Pension Fund is the best performing fund in this category. This fund generated 10.64% annualized returns in the last 5 years and 7.69% returns in the last 1 year. If one would have invested Rs 5,000 per month through SIP for 5 years, the investment amount would have been Rs 3 Lakhs (5,000 x 60) and your fund value would have grown to Rs 3.93 Lakhs.

In the short term of 1 year, the HDFC Pension Fund and Kotak Pension fund have outperformed among the NPS funds

Next, it is the list of Funds in Tier-I Equity Plans and their performance.

5) Govt Bond Plans

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Best NPS Funds in 2019 from Tier-I

Here is the performance of Funds under this category.

LIC Pension Fund is the best fund in this category. This fund generated 11.86% annualized returns in the last 5 years and 19.59% returns in the last 1 year. If one would have invested Rs 5,000 per month through SIP for 5 years, the investment amount would have been Rs 3 Lakhs (5,000 x 60) and your fund value would have grown to Rs 4.01 Lakhs.

In the short term of 1 year, the LIC Pension Fund and Kotak Pension fund have outperformed among the NPS funds.

Next, it is the list of Funds in Tier-I Government Bond Plans and their performance.

6) Corporate Debt Plans

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Best NPS Funds in 2019 from Tier-I

Here is the performance of Funds under this category.

ICICI Prudential Pension Fund is the best performing fund in this category. This fund generated 10.29% annualized returns in the last 5 years and 12.52% returns in the last 1 year. If one would have invested Rs 5,000 per month through SIP for 5 years, the investment amount would have been Rs 3 Lakhs (5,000 x 60) and your fund value would have grown to Rs 3.8 Lakhs.

In the short term of 1 year, Birla Sun Life Pension Scheme and ICICI Prudential Pension fund have outperformed among the NPS funds.

Next, it is the list of Funds in Tier-I Corporate Bond Plans and their performance.

7) Equity Plans

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Best NPS Funds in 2019 from Tier-II

Here is the performance of Funds under this category.

UTI Retirement Solutions is the best performing fund in this category. This fund generated 10.67% annualized returns in the last 5 years and 6.87% returns in the last 1 year. If one would have invested Rs 5,000 per month through SIP for 5 years, the investment amount would have been Rs 3 Lakhs (5,000 x 60) and your fund value would have grown to Rs 3.87 Lakhs.

In the short term of 1 year, the Kotak Pension Fund and HDFC Pension fund have outperformed among the NPS funds.

Next, it is the list of NPS Funds in Tier-II Equity Plans and their performance.

8) Govt Bond Plans

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Best NPS Funds in 2019 from Tier-II

Here is the performance of NPS Funds under this category.

The LIC Pension Fund is the best fund in this category. This fund generated 11.88% annualized returns in the last 5 years and 20.66% returns in the last 1 year. If one would have invested Rs 5,000 per month through SIP for 5 years, the investment amount would have been Rs 3 Lakhs (5,000 x 60) and your fund value would have grown to Rs 4.04 Lakhs.

In the short term of 1 year, LIC Pension Fund and HDFC Pension fund have outperformed among the NPS funds.

Next, it is the list of Funds in Tier-II Government Bond Plans and their performance.

9) Corporate Debt Plans

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Best NPS Funds in 2019 from Tier-II

Here is the performance of the Best Funds under this category.

ICICI Prudential Pension Fund is the best fund in this category. This fund generated 10.15% annualized returns in the last 5 years and 12.2% returns in the last 1 year. If one would have invested Rs 5,000 per month through SIP for 5 years, the investment amount would have been Rs 3 Lakhs (5,000 x 60) and your fund value would have grown to Rs 3.78 Lakhs.

In the short term of 1 year, ICICI Prudential Pension fund and HDFC Pension fund have outperformed among the NPS funds.

Next is the list of Funds in Tier-II Corporate Bond Plans and their performance.

Must Read –

PENSION PLANS IN INDIA – COMPARE ALL BEST PLANS

Who is the Best NPS Fund Manager 2019?

Equity NPS Funds – UTI Retirement Solutions and HDFC Pension Fund are performing better.

Govt Bonds NPS Funds – LIC Pension fund and SBI Pension Funds are doing good.

Corp Debt Plan NPS Funds – ICICI Pension Fund and Kotak Pension Fund are best.

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