Best NPS Scheme 2025: A Comprehensive Comparison
In 2004, the Indian government launched the National Pension Scheme (NPS), a long-term retirement scheme. With market-linked assets, this top investing choice seeks to give you a consistent income after retirement. This voluntary pension fund is governed by the Pension Fund Regulatory and Development Authority of India (PFRDA). Your NPS Account's contribution is invested in market-linked securities. The goal is to generate compound annual returns on investments over the long term. The program is open to all Indian citizens between the ages of 18 and 70. Before investing in NPS, an investor must compare various options and choose the best one.
Table of Content
Benefits of Investing in NPS Schemes
Depending on whether you have a Tier-I or Tier-II account, investing in NPS will provide you an advantage over fixed-income plans and enable you to receive tax benefits of up to Rs. 1.5 lakh under Sections 80C and 80CCD of the Income Tax Act, 1961. NPS plans have a lock-in period that lasts until retirement, but in some circumstances, you may decide to take your money out early to meet unanticipated expenses. Choosing how to allocate your investments is another advantage of the pension plan. You can choose to choose the money manually or automatically with this strategy. The auto choice will distribute your investments according to your age and risk tolerance, whilst the active choice will let you choose the strategy and portion of your money that you want to invest in.
Pension Fund Managers in India
There are eleven pension fund managers in India. These are:
SBI Pension Funds Pvt. Ltd.
UTI Retirement Solutions Ltd.
LIC Pension Fund Ltd.
ICICI Prudential Pension Fund Management Co. Ltd.
HDFC Pension Management Co. Ltd.
Aditya Birla Sunlife Pension Management Ltd.
Kotak Mahindra Pension Fund Ltd.
Max Life Pension Fund Management Ltd.
Axis Pension Fund Management Ltd.
Tata Pension Management Pvt. Ltd.
DSP Pension Fund Managers Pvt. Ltd.
Among these, SBI Pension Fund, UTI Retirement Solutions, and LIC Pension Fund are the only ones managing pension contributions of government employees under NPS.
Best NPS Schemes 2025: A Comparison
Although it is too early to compare the NPS Schemes as of January 2025, you can get an insight by checking the numbers for 2024. Listed below is a comparative analysis of different NPS Scheme options available in India as of 30th July 2024.
Best Performing NPS Tier-I Returns 2024: Scheme A
Pension Fund | NAV | Returns 1 Year | Returns 3 Years | Returns 5 Years | Returns 7 Years | Returns 10 Years | Returns Inception |
Aditya Birla Sun Life Pension Management Ltd. | 15.7795% | 10.38% | 7.38% | 6.25% | 6.54% | NA | 6.53% |
Axis Pension Fund Management Limited | 11.196 | 6.79% | NA | NA | NA | NA | 6.57% |
HDFC Pension Management Co. Ltd. | 18.9785 | 11.20% | 8.71% | 8.48% | 8.81% | NA | 8.55% |
ICICI Pru. Pension Fund Mgmt Co. Ltd. | 17.0439 | 11.73% | 7.25% | 6.74% | 7.26% | NA | 7.18% |
Kotak Mahindra Pension Fund Ltd. | 16.8558 | 11.95% | 6.18% | 6.63% | 7.09% | NA | 6.93% |
LIC Pension Fund Ltd. | 17.565 | 7.97% | 6.77% | 7.23% | 7.67% | NA | 7.49% |
Max Life Pension Fund Management Limited | 9.7471 | 7.21% | NA | NA | NA | NA | -1.35% |
SBI Pension Funds Pvt. Ltd | 19.3857 | 13.37% | 7.39% | 9.26% | 9.13% | NA | 8.86% |
Tata Pension Management Pvt. Ltd. | 11.5927 | 9.37% | NA | NA | NA | NA | 7.88% |
UTI Pension Fund Ltd. | 16.2477 | 9.22% | 6.56% | 6.08% | 6.43% | NA | 6.42% |
DSP Pension Fund Managers Private Limited | 10.3706 | NA | NA | NA | NA | NA | 3.71% |
Best Performing NPS Tier-I Returns 2024: Scheme C
Pension Fund | NAV | Returns 1 Year | Returns 3 Years | Returns 5 Years | Returns 7 Years | Returns 10 Years | Returns Inception |
Aditya Birla Sun Life Pension Management Ltd. | 17.8395 | 8.14% | 6.26% | 7.52% | 8.03% | NA | 8.33% |
Axis Pension Fund Management Limited | 11.4108 | 7.88% | NA | NA | NA | NA | 7.72% |
HDFC Pension Management Co. Ltd. | 26.5039 | 8.40% | 6.39% | 7.76% | 7.74% | 9.03% | 9.26% |
ICICI Pru. Pension Fund Mgmt Co. Ltd. | 40.0018 | 8.08% | 6.15% | 7.25% | 7.45% | 8.94% | 9.54% |
Kotak Mahindra Pension Fund Ltd. | 38.3804 | 8.15% | 6.14% | 6.70% | 6.84% | 8.45% | 9.24% |
LIC Pension Fund Ltd. | 25.8642 | 7.89% | 6.05% | 7.35% | 7.32% | 8.72% | 9.00% |
Max Life Pension Fund Management Limited | 11.4063 | 7.63% | NA | NA | NA | NA | 7.24% |
SBI Pension Funds Pvt. Ltd | 40.0972 | 8.07% | 6.08% | 7.39% | 7.44% | 8.78% | 9.56% |
Tata Pension Management Pvt. Ltd. | 11.4058 | 8.10% | NA | NA | NA | NA | 6.99% |
UTI Pension Fund Ltd. | 35.5083 | 8.00% | 6.01% | 7.10% | 7.09% | 8.50% | 8.69% |
DSP Pension Fund Managers Private Limited | 10.4903 | NA | NA | NA | NA | NA | 4.90% |
Best Performing NPS Tier-I Returns 2024: Scheme E
Pension Fund | NAV | Returns 1 Year | Returns 3 Years | Returns 5 Years | Returns 7 Years | Returns 10 Years | Returns Inception |
Aditya Birla Sun Life Pension Management Ltd. | 28.7176 | 33.38% | 19.51% | 19.71% | 15.37% | NA | 15.71% |
Axis Pension Fund Management Limited | 14.8893 | 35.08% | NA | NA | NA | NA | 25.13% |
HDFC Pension Management Co. Ltd. | 53.5163 | 34.22% | 19.25% | 20.22% | 15.69% | 14.29% | 16.47% |
ICICI Pru. Pension Fund Mgmt Co. Ltd. | 73.4392 | 37.56% | 20.87% | 20.90% | 15.88% | 14.10% | 13.99% |
Kotak Mahindra Pension Fund Ltd. | 67.1286 | 36.19% | 20.40% | 20.56% | 15.55% | 14.12% | 13.33% |
LIC Pension Fund Ltd. | 45.2454 | 33.33% | 19.71% | 19.91% | 14.77% | 13.13% | 14.67% |
Max Life Pension Fund Management Limited | 14.7441 | 35.98% | NA | NA | NA | NA | 22.91% |
SBI Pension Funds Pvt. Ltd | 58.3562 | 32.21% | 19.23% | 18.93% | 14.69% | 13.38% | 12.29% |
Tata Pension Management Pvt. Ltd. | 15.9755 | 40.91% | NA | NA | NA | NA | 27.19% |
UTI Pension Fund Ltd. | 72.634 | 39.73% | 20.72% | 20.81% | 15.86% | 14.41% | 13.93% |
DSP Pension Fund Managers Private Limited | 12.4756 | NA | NA | NA | NA | NA | 24.76% |
Best Performing NPS Tier-I Returns 2024: Scheme G
Pension Fund | NAV | Returns 1 Year | Returns 3 Years | Returns 5 Years | Returns 7 Years | Returns 10 Years | Returns Inception |
Aditya Birla Sun Life Pension Management Ltd. | 17.4933 | 9.66% | 7.04% | 7.14% | 7.49% | NA | 8.04% |
Axis Pension Fund Management Limited | 11.6985 | 9.75% | NA | NA | NA | NA | 9.16% |
HDFC Pension Management Co. Ltd. | 26.1392 | 9.89% | 6.85% | 7.14% | 7.65% | 9.15% | 9.11% |
ICICI Pru. Pension Fund Mgmt Co. Ltd. | 34.809 | 9.59% | 6.72% | 6.85% | 7.48% | 9.06% | 8.55% |
Kotak Mahindra Pension Fund Ltd. | 34.9192 | 9.83% | 7.02% | NA | 7.52% | 9.14% | 8.55% |
LIC Pension Fund Ltd. | 28.1745 | 9.64% | 6.95% | 7.03% | 8.00% | 9.63% | 9.83% |
Max Life Pension Fund Management Limited | 11.8175 | 9.42% | NA | NA | NA | NA | 9.28% |
SBI Pension Funds Pvt. Ltd | 37.7604 | 9.80% | 6.88% | 7.02% | 7.56% | 9.19% | 9.11% |
Tata Pension Management Pvt. Ltd. | 11.7751 | 9.39% | NA | NA | NA | NA | 8.75% |
UTI Pension Fund Ltd. | 33.7851 | 10.02% | 7.16% | 7.00% | 7.36% | 8.88% | 8.33% |
DSP Pension Fund Managers Private Limited | 10.766 | NA | NA | NA | NA | NA | 7.66% |
Top Performing NPS Tier-II Returns 2024: Scheme E
Pension Fund | NAV | Returns 1 Year | Returns 3 Years | Returns 5 Years | Returns 7 Years | Returns 10 Years | Returns Inception |
Aditya Birla Sun Life Pension Management Ltd. | 28.8335 | 34.13% | 19.90% | 19.96% | 15.57% | NA | 15.77% |
Axis Pension Fund Management Limited | 15.0211 | 35.72% | NA | NA | NA | NA | 25.76% |
HDFC Pension Management Co. Ltd. | 46.2877 | 34.25% | 19.31% | 20.22% | 15.67% | 14.35% | 14.94% |
ICICI Pru. Pension Fund Mgmt Co. Ltd. | 57.6566 | 36.06% | 20.66% | 20.81% | 15.86% | 14.08% | 12.73% |
Kotak Mahindra Pension Fund Ltd. | 59.0831 | 36.20% | 20.44% | 20.39% | 15.46% | 14.05% | 12.91% |
LIC Pension Fund Ltd. | 37.6194 | 32.19% | 19.56% | 19.80% | 14.62% | 12.87% | 12.83% |
Max Life Pension Fund Management Limited | 15.5773 | 34.95% | NA | NA | NA | NA | 26.55% |
SBI Pension Funds Pvt. Ltd | 53.9657 | 32.15% | 19.35% | 19.03% | 14.77% | 13.43% | 12.21% |
Tata Pension Management Pvt. Ltd. | 15.9553 | 40.81% | NA | NA | NA | NA | 27.11% |
UTI Pension Fund Ltd. | 57.993 | 36.19% | 19.55% | 20.21% | 15.60% | 14.24% | 12.76% |
DSP Pension Fund Managers Private Limited | 12.0246 | NA | NA | NA | NA | NA | 20.25% |
Best NPS Fund Managers: Central Government Scheme
Under the NPS Central Government Scheme, the UTI Retirement Solutions Fund produced the highest returns of 8.89% over the previous five years as of June 2024. The fund primarily makes investments in central government loans and government (GOI) assets. The LIC Pension Fund returns, which were generated at 8.84% for the same time, are the next in line. Over the previous five years, SBI Pension Fund similarly reported returns of 8.83%.
Best NPS Fund Managers: State Government Scheme
According to the NPS state government scheme, the UTI Retirement Solutions Fund produced the highest returns of 8.89% in the previous five years as of June 2024. The financial sector (banking and state development loans) makes up the majority of the fund's holdings. Following suit, the SBI Pension Fund produced returns of 8.79% throughout the previous five years.
Calculation of NPS Interest Rate 2025
The performance of the underlying market-linked NPS fund, which is then compounded monthly, affects NPS returns. Because of this, determining the NPS interest rate is a difficult procedure. Consequently, using an online NPS calculator is advised. To estimate the returns from your NPS contributions, just enter your age, monthly investment, expected return on investment, and expected return from pension.
Conclusion
In India, the finest pension plan is the National Pension System (NPS). It is a program supported by the government to ensure retirement financial security. NPS is a strong long-term investment choice because of its alluring attributes, which include tax advantages and a competitive interest rate of 9%–12% p.a. in 2025. NPS makes a substantial contribution to financial planning and security by giving people an organised and effective means of increasing their retirement corpus.
FAQ
Q1. What are the Tier 1 and Tier 2 NPS accounts?
Tier I and Tier II are the two categories of NPS accounts. All tax benefits are applicable to Tier I accounts, which are necessary for NPS investments. But only after fulfilling the NPS exit requirements may one withdraw from this restricted and conditional withdrawable retirement account. Any Tier-1 account user can have a Tier-II account added to them; these accounts are optional. Although subscribers can take money out of this account whenever they choose, investing in Tier II accounts has no tax benefits.
Q2. Which is the best fund manager for NPS in India?
The best fund managers for NPS include the following names:
LIC Pension Fund
Axis Pension Fund Management Limited
UTI Retirement Solutions Fund
Kotak Mahindra Pension Fund
Aditya Birla Sunlife Pension Fund
Q3. How are NPS returns calculated?
Monthly NPS returns are determined by the performance of the selected investment option. You also receive returns on your returns because the NPS rate of interest is constantly compounded.
Q4. Can a government employee select a fund manager of their choice for NPS?
Indeed, NPS investors now have the freedom to select a fund manager that best suits their needs. Previously, the PFRDA would choose the fund managers on behalf of government sector employees under a default plan. They are now free to select investment plans and fund managers based on their personal preferences. To take advantage of this flexibility, investors must obtain specific approval from the state government if they work for the state government. They can choose one of the three PFMs and an investment plan based on their financial objectives once they obtain approval.
Q5. What is the NPS interest rate in 2025?
No fixed interest rate is provided by the NPS. The performance of the selected asset class determines the interest rate returns under the NPS system. NPS returns have historically varied from 9% to 12%.
Q6. Where can I find the most recent NPS interest rates?
No NPS interest rate is announced by the Pension Fund Regulatory and Development Authority, or PFRDA. On the National Pension System Trust website, you can examine the performance of the various asset classes under NPS.
Q7. Is the NPS interest rate guaranteed?
No, there is no assurance of the NPS interest rate. The performance of the selected investment option—such as government bonds or stocks—determines this.
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