If you're looking to maximise investment returns while securing your retirement, the National Pension Scheme (NPS) can be an excellent option. It is a government-backed scheme that provides a long-term retirement solution. NPS facilitates long-term wealth accumulation and has a robust track record of delivering high returns.
In this article, we'll delve into NPS's historical performance to see how it has consistently outperformed many traditional investment options.
One of the key features of NPS is its exposure to equity investments. Equities have historically delivered superior growth, making this an excellent feature for investors looking to enhance their investment returns over time.
NPS allows investors to balance the high risk of equity investments with debt investments, which include Government Securities and Corporate Bonds. This ensures investors can benefit from the high returns of equities while enjoying the safety and steady income from debt instruments.
Additional Read: How to Open NPS Account Online?
NPS has consistently delivered impressive returns over the years, making it a valuable addition to your investment strategy. Moreover, with NPS, you can choose the allocation between equity, debt, and alternative investments based on your risk tolerance and financial objectives, ensuring your investments are aligned with your long-term goals.
Let's look at the historical return data for NPS across schemes E, C, and G:
| Pension Fund | AUM (Rs. Crores) | NAV | 1 year returns | 3 year returns | 5 year returns | 7 year returns | 10 year returns | Returns inception |
| Aditya Birla Sun Life Pension Management Ltd. | 806.16 | 28.6855 | 32.94% | 19.30% | 19.32% | 15.30% | NA | 15.72% |
| Axis Pension Fund Management Ltd. | 1,784.39 | 14.8684 | 34.68% | NA | NA | NA | NA | 25.21% |
| HDFC Pension Management Co. Ltd. | 44,892.03 | 53.3728 | 33.27% | 18.96% | 19.74% | 15.57% | 14.26% | 16.46% |
| ICICI Prudential Pension Fund Management Co. Ltd. | 16,019.08 | 73.0923 | 36.92% | 20.67% | 20.35% | 15.76% | 14.09% | 13.98% |
| Kotak Mahindra Pension Fund Ltd. | 2,511.05 | 67.0306 | 35.35% | 20.39% | 20.21% | 15.57% | 14.11% | 13.33% |
| LIC Pension Fund Ltd. | 6,010.17 | 45.1312 | 32.67% | 19.54% | 19.32% | 14.65% | 13.09% | 14.66% |
| Max Life Pension Fund Management Ltd. | 332.42 | 14.7156 | 35.66% | NA | NA | NA | NA | 22.93% |
| SBI Pension Funds Pvt. Ltd. | 19,343.37 | 58.1578 | 31.58% | 18.87% | 18.44% | 14.58% | 13.35% | 12.27% |
| Tata Pension Management Pvt. Ltd. | 1,160.75 | 15.9200 | 40.61% | NA | NA | NA | NA | 27.13% |
| UTI Pension Fund Ltd. | 2,578.81 | 72.3528 | 38.82% | 20.41% | 20.23% | 15.76% | 14.39% | 13.91% |
| DSP Pension Fund Management Pvt. Ltd. | 206.46 | 12.4697 | NA | NA | NA | NA | NA | 24.70% |
| Pension Fund | AUM (Rs. Crores) | NAV | 1 year returns | 3 year returns | 5 year returns | 7 year returns | 10 year returns | Returns inception |
| Aditya Birla Sun Life Pension Management Ltd. | 386.99 | 17.8289 | 7.94% | 6.24% | 7.60% | 8.13% | NA | 8.34% |
| Axis Pension Fund Management Ltd. | 1,018.15 | 11.4057 | 7.67 | NA | NA | NA | NA | 7.74% |
| HDFC Pension Management Co. Ltd. | 16,998.332 | 26.4805 | 8.17% | 6.36% | 7.83% | 7.73% | 9.02% | 9.26% |
| ICICI Prudential Pension Fund Management Co. Ltd. | 6,885.00 | 39.9635 | 7.78% | 6.13% | 7.32% | 7.45% | 8.94% | 9.54% |
| Kotak Mahindra Pension Fund Ltd. | 925.07 | 38.3602 | 7.93% | 6.10% | 6.78% | 6.83% | 8.45% | 9.24% |
| LIC Pension Fund Ltd. | 3,045.38 | 25.8460 | 7.65% | 6.00% | 7.44% | 7.32% | 8.72% | 9.00% |
| Max Life Pension Fund Management Ltd. | 194.54 | 11.3941 | 7.29% | NA | NA | NA | NA | 7.22% |
| SBI Pension Funds Pvt. Ltd. | 9,118.01 | 40.0693 | 7.82% | 6.06% | 7.48% | 7.45% | 8.77% | 9.56% |
| Tata Pension Management Pvt. Ltd. | 499.98 | 11.3985 | 7.86% | NA | NA | NA | NA | 6.99% |
| UTI Pension Fund Ltd. | 997.91 | 35.4868 | 7.74% | 5.96% | 7.19% | 7.10% | 8.49% | 8.69% |
| DSP Pension Fund Management Pvt. Ltd. | 107.01 | 10.4851 | NA | NA | NA | NA | NA | 4.85% |
| Pension Fund | AUM (Rs. Crores) | NAV | 1 year returns | 3 year returns | 5 year returns | 7 year returns | 10 year returns | Returns inception |
| Aditya Birla Sun Life Pension Management Ltd. | 715.27 | 17.5068 | 9.38% | 7.06% | 7.23% | 7.48% | NA | 8.07% |
| Axis Pension Fund Management Ltd. | 1,409.19 | 11.6861 | 9.37% | NA | NA | NA | NA | 9.23% |
| HDFC Pension Management Co. Ltd. | 28,297.67 | 26.1148 | 9.62% | 6.82% | 7.23% | 7.65% | 9.12% | 9.13% |
| ICICI Prudential Pension Fund Management Co. Ltd. | 11,243.66 | 34.8294 | 9.29% | 6.70% | 7.02% | 7.48% | 9.03% | 8.56% |
| Kotak Mahindra Pension Fund Ltd. | 1.634.54 | 34.8938 | 9.58% | 7.02% | 7.16% | 7.53% | 9.12% | 8.56% |
| LIC Pension Fund Ltd. | 5791.05 | 28.1487 | 9.28% | 6.91% | 7.14% | 7.99% | 9.60% | 9.85% |
| Max Life Pension Fund Management Ltd. | 416.15 | 11.8249 | 9.07% | NA | NA | NA | NA | 9.37% |
| SBI Pension Funds Pvt. Ltd. | 18,842.57 | 37.7281 | 9.49% | 6.86% | 7.13% | 7.56% | 9.14% | 9.12% |
| Tata Pension Management Pvt. Ltd. | 710.61 | 11.7852 | 9.13% | NA | NA | NA | NA | 8.85% |
| UTI Pension Fund Ltd. | 1,852.34 | 33.7487 | 9.71% | 7.13% | 7.06% | 7.35% | 8.85% | 8.34% |
| DSP Pension Fund Management Pvt. Ltd. | 160.44 | 10.7781 | NA | NA | NA | NA | NA | 7.78% |
NPS allows investors to diversify their investments across equities, debt, and alternative assets, providing a tailored strategy aligned with their risk appetites and financial goals. Its track record of delivering consistent returns over the years highlights the effectiveness of its diversified asset allocation.
Ready to see how NPS can work for you? Check out Tata Capital Moneyfy's free NPS calculator to determine your potential returns.
NPS is ideally suited for someone seeking a retirement-oriented investment option with moderate risk. It offers benefits such as disciplined savings, long-term wealth creation, tax benefits u/s 80C and 80CCD (1B), and potentially higher returns than fixed interest generating instruments.
NPS returns depend on the choice of asset allocation between equities, corporate bonds, government securities, etc., along with the chosen fund manager’s strategy, market conditions, and investment duration. Higher equity exposure may yield better long-term returns, but it amplifies the risk in investments.
NPS has historically provided stable long-term returns, averaging 9% to 12% annually. Equity funds tend to yield potentially higher returns (10% to 12%) than corporate bonds (8% to 10%) and government securities (7% to 9%). Returns vary significantly by asset allocation, fund manager, and market performance.
NPS returns usually range between 9% and 12% per annum, which is significantly higher than the returns provided by Fixed Deposits (6% to 8%) but slightly lower than equity-based mutual funds (10% to 14%). However, such mutual funds are highly volatile and do not offer any tax benefits.
PPF (Public Provident Fund) and EPF (Employee Provident Fund) are more suited for conservative investors with annualized returns ranging between 7% and 8.5%. NPS, on the other hand, typically delivers 9% to 12% annualized returns with market-linked growth and additional tax-saving benefits.
The following tips can help you enhance your NPS returns:
Yes. You can switch your fund manager once during a financial year for your Tier I account and multiple times for your Tier II account. You can also adjust the asset allocation in your portfolio based on your age, risk appetite, and market conditions to optimize returns.
Yes. You can make partial withdrawals from your Tier I NPS account after three years of account opening. However, the withdrawal is limited to 25% of the total corpus and is permitted only for specific purposes such as medical treatment, a child’s education, marriage, home purchase/construction, etc.
No. NPS withdrawals are not entirely subject to taxation. You can withdraw up to 60% of the corpus at maturity, i.e., once you reach the age of 60 years. This withdrawal is completely tax-exempt. However, the remaining 40% is invested in an annuity scheme to provide a regular income, which is taxable as per your income tax slab.
Below are the applicable charges for investing in NPS:
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08 September 2025
3 mins read
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