I am planning my investments for the next few years. I just wanted to know is NPS a good investment or not?
Well, it really depends on your financial goals. If you are looking at long-term savings and tax benefits, NPS or National Pension Scheme is a good option.
Since it is backed by the Government of India and regulated by PFRDA, it is relatively safe. A few things that make NPS stand out for me are that you get to choose and allocate your funds in a mix of equities, government bonds, corporate debt instruments, etc. Your investments can start by as low as Rs. 500.
It’s a great option to build your retirement corpus for sure. But I would suggest that you run through all the terms and conditions. For example, since it is geared towards retirement, there is a lock in period. Your returns will be market-linked, so that is another concerning point in my opinion. Also, in case you want to withdraw an amount from NPS, there are many restrictions.
As I said, you should know what your financial goals are and based on that, you can have a mix of different investment instruments. NPS could be a part of it.