Best & 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
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.
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.
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.
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.
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.
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
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Now I am 22.I am planning to invest rs.1000 monthly in nps scheme.I want to know which scheme is better and how much returns will I get at the time of my retirement.
I am 30 and my AMT in nps as on date is RS 16.55 lakhs. I can take risk and in dilemma which pension fund and which asset life cycle to invest in..??? I want to change from LIC to any other pension fund in nps. Also please inform me which pension fund to select and also clarify whether I can go with aggressive life cycle…
Thanq sir.
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
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
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?
Very informative
Different year different amount can invest?
Hi,
I just switched my NPS fund manager from SBI to ICICI. I’d like to know 1. if ICICI would charge me more than SBI for managing my NPS account.
2. I initially had chosen SBI as I thought since it is a PSB the charges would be transparent and the money would be safe. Should I switch back to SBI next year?
Superb information given regarding NPS Thank You.
Hi Suresh,
Can you post reviews regarding “Aegon Life Premier Endowment Insurance plan”.Kindly suggest your valuable advise on the benefits that it offers.
Thanks,
Manoj
Sure Srinivas. Can you pls post on suggest a topic option available on top of the blog. This would be on my radar when I write next week articles.
I am 31 year old working in private sector. I would like to join in Swalamban NPS scheme (not interested on Tier I & II account). Is there any restriction to open Swalamban NPS for me? If not how and where to open the account?
Elango, Swalamban is for Govt employees, you cannot subscribe
Hi Suresh,
Why Tier I and II have different returns? Are there any change in the asset allocation across them?
Hi Suresh
Can you please let us know for my 5 year old child should I invest in ULIP or mutual fund? My objective is long term investment of arond 5000rs per month. have been advised by my financial planner to invest in ULIP ans mutual fund according to him will be expensive in long term.
Thanks
Gaurav
Dear Gaurav,
I Suggest you to choose mutual funds over ULIPS and regarding the expenses, it's not true that mutual funds will be expensive in the longterm.
How..when will be the subscribers notified to change the pension fund managers? Is there a timeline?
This is best info. On nps ever found.thnx a lot.
Great comparison. Very rare to find these kinds of comparison related to NPS.
Thank you Ranjan
Hello Suresh,
Nice Blog, Very Informative 🙂
I have NPS Tier1 Account. In this me and my employer is contributing and the Fund Manager is HDFC pension fund. for each transition it took some 18-19 INR from me and my employer. I want to change my Fund manager.
1. How can i change my NPS Fund manager ?
2. How much SBI and ICICI is charging for each transition every month?
Please reply me back.
Thanks In advance
Rohit Gupta
Highly informative. Thanks for that. BTW can we open Tier 2 Option directly since Tier 1 having some restrictions. Can you please guide us some light on this also sir? Also is there any balanced fund (Debt and Equity) So that losses can be minimized
Can you please let me know the process for Investing in NPS?
You can approach any of the listed NPS agents (like ICICI Bank, HDFC Bank etc.,) where you can open NPS account
Excellent article and insight about the NPS. As usual u have covered the entire things in this article and provided a comprehensive view if NPS . I just wanted to know that in Tier 1 Equity plans the 5 yr and 3 yr returns of SBI fund is slightly lower than ICICI fund but the NAV of Sbi fund is much lower than that of ICICI. Why is it so? Isn’t it contradictory ?
Thanks Vivek. I hope you are doing well. It depends on when they started it. e.g. If one started with Rs 10, 5 years back and another started NPS scheme say 3 years back, the second one NAV would be on lower side (assuming same performance).
Very informative and interesting post.