Best and Worst Performing New Pension Scheme (NPS) Funds in 2016

Best and Worst Performing NPS Funds in 2016Best & Worst Performing NPS Funds in 2016


One of the best ways to save retirement money is investing in New Pension Scheme (NPS). A couple of years back, NPS funds gave returns as high as 14%. It’s the time to review the NPS Funds and how they are performing in 2016 and its performance in last 5 years. This way, Investors would get an idea in choosing a good NPS Fund Manager. How NPS funds performed in last 5 years? Which are those best and worst performing NPS Funds in 2016? Who are the best NPS fund managers in last 5 years?

What is New Pension Scheme / National Pension Scheme (NPS)?


If you are already aware of this, skip this section.

National Pension Scheme (NPS) is a government approved pension scheme for Indian citizens in the age group of 18 to 60 years. Apart from Central and State Government employees, even others can subscribe to this NPS. This is one of the good retirements saving scheme.

Also Read: What is New Pension Scheme (NPS) and how it helps in getting higher returns for your retirement?

What are various asset classes available?


It has 3 asset classes:

a) Equity plans – Which invests predominantly in equity instruments. This is high risk-high return option.

b) Govt bond plans – Which invests in Govt securities like govt bonds, etc., It is low risk-low return option.

c) Corporate bond plans – Which invests in securities other than govt securities. This is medium risk-medium return option.

What are the accounts available under NPS?


There are 2 accounts which are offered as part of NPS Scheme. Tier-I account and Tier-II account.

  • Tier-I – Investments can be made into this account, however, has restriction in terms of withdrawal.
  • Tier-II – Investments can be made into this account without any restrictions on withdrawal.
  • Apart from above, there is a Swavalamban NPS scheme / NPS Lite for Govt. employees.

Best and Worst Performing New Pension Scheme (NPS) Funds in 2016


I have analysed the NPS Returns data in last 5 years and here are my views. (Data Source: Valueresearchonline as on 26-Feb-2016)

Performance of Tier-I Account of NPS

Tier-I – Equity Plans


  • ICICI Prudential Pension Fund is the best performer in this category. This generated 18.69% loss in last 1 year and 7.77% annualized returns in last 5 years.  We all know stock markets are taking a beating and investor money is getting eroded day by day, hence loss of 18% in one year may not be surprising. However, compared to other NPS funds, this has performed well.
  • The Reliance Capital Pension Fund is the worst performer in this category. This generated 18.02% loss in last 1 year and 6.38% annualized returns in last 5 years.
  • NPS Interest rate calculators (computations) for the past 5 years are given below

Best and worst NPS funds-Tier-I-Equity Plans

Also Read: How NPS is best investment plan compared to other retirement options?

Tier-I – Government Bond Plan


  • The SBI Pension Fund is the best performer in this category. This generated 2.03% returns in last 1 year and 8.89% annualized returns in last 5 years. It indicates that it can provide better returns than bank FD’s in long run.
  • Even ICICI Prudential Pension Fund is the best performer in this category. This generated 2.05% returns in last 1 year and 8.85% annualized returns in last 5 years.
  • The UTI Retirement Solutions Fund is the worst performer in this category. This generated 2.78% returns in last 1 year and 8.26% annualized returns in last 5 years.

Best and worst NPS funds-Tier-I-Govt Bond Plans

Tier-I – Corporate Debt Plans


  • ICICI Prudential Pension Fund is the best performer in this category. This generated 8.42% returns in last 1 year and 11.08% annualized returns in last 5 years. One should note that there is still an element of risk in these plans. Instances like Jindal Steel & Power debt instruments downgrading could have an impact in the future as such funds invests in corporate debt plans.
  • Reliance Capital Pension Fund is the worst performer in this category. This generated 7.32% returns in last 1 year and 10.32% annualized returns in last 5 years.

Best and worst NPS funds-Tier-I-Corporate Debt Plans

Tier-II – Equity Plans


  • The Kotak Pension Fund is the best performer in this category. This generated 17.24% loss in last 1 year and 7.08% annualized returns in last 5 years.
  • ICICI Prudential Pension Fund is the worst performer in this category. This generated 18.7% loss in last 1 year and 6.36% annualized returns in last 5 years.

Best and worst NPS funds-Tier-II-Equity Plans

Tier-II – Government Bond Plan


  • ICICI Prudential Pension Fund is the best performer in this category. This generated 2.11% returns in last 1 year and 8.93% annualized returns in last 5 years. If you are thinking whether NPS Vs PPF which is better, you can opt for this Govt bond plan which gives highest returns than PPF.
  • UTI Retirement Solutions Fund is the worst performer in this category. This generated 2.64% returns in last 1 year and 8.17% annualized returns in last 5 years.

Best and worst NPS funds-Tier-II-Govt Bond Plans

Also Read: Should you invest in HDFC Click 2 Retire – Online ULIP Plan for your retirement?

Tier-II – Corporate Debt Plans


  • ICICI Prudential Pension Fund is the best performer in this category. This generated 7.78% returns in last 1 year and 11.05% annualized returns in last 5 years.
  • Reliance Capital Pension Fund is the worst performer in this category. This generated 6.91% returns in last 1 year and 9.62% annualized returns in last 5 years.

Best and worst NPS funds-Tier-II-Corporate Debt Plans

Conclusion: If you observe, ICICI Prudential Fund and SBI Pension fund has been consistently performing well in equity, govt debt plan and corporate debt plan. Choosing the best NPS fund managers can help you to get superior returns in NPS in the long run. In case you are not happy with current NPS fund manager, you can opt to shift to a better NPS fund manager.

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Suresh
Best and Worst Performing New Pension Scheme (NPS) Funds in 2016

25 comments

  • HARSH GARG

    WHEN WE WOULD TAKE OUR INVESTMENT BACK

    WHAT IS THE LOCK IN PREIOD

    IF THERE IS ANY MISHAPPENING WHO WILL RUN THE NPS

    OUR NOMINEE WILL GET THE HOW MUCH MONEY

  • seralathan

    If I invest 4000 per month what is the monthly pension after the age of 60. I want to know this

    because i would like to invest in NPS. present age 54 importantly what is the income tax

    benefit u/s 80c or 80ccd pl give me the details

  • Pinaki Halder

    My retirement age is 58. Now I am 43 years of age. I would like to discontinue NPS premium payout along with my retirement. And will like to avail benefit from then on. Is it possible?

  • V.SUBRAMANIAN

    Very informative

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