What is the NPS interest rate?

NPS does not have a fixed interest rate. Returns depend on the fund manager and asset allocation. Equity (Tier I) historically delivers 9-12% CAGR, corporate bonds 7-9%, government securities 6-8%. The default auto-choice lifecycle fund targets 8-10% average.

How much tax benefit does NPS give?

NPS gives three layers of deduction: 1) Up to ₹1.5 lakh under Section 80C, 2) Additional ₹50,000 under Section 80CCD(1B) exclusively for NPS, 3) Employer contribution up to 10% of salary under 80CCD(2). Maximum total deduction can reach ₹2 lakh.

Can I withdraw from NPS before 60?

Partial withdrawal up to 25% is allowed after 3 years for specific reasons: higher education, marriage, home purchase, or medical treatment. Premature exit before 60 is allowed after 5 years but only 20% is tax-free (80% must go to annuity).

What happens to NPS at age 60?

At 60, you can withdraw up to 60% of the corpus tax-free as lump sum. The remaining 40% must be used to purchase an annuity plan for monthly pension. You can defer withdrawal until age 75.

🏛️ Pension Calculator

NPS Calculator

Calculate your National Pension Scheme maturity corpus, monthly pension, lump sum withdrawal and total tax savings under Section 80CCD.

Your details

Current age

yrs

Retirement age

Income tax slab

Monthly contribution (₹) ₹5,000

₹500₹50,000₹1 L

Asset allocation (expected returns) Drag sliders below

Equity (E)

50%

~11% return

Corp Bonds (C)

30%

~8% return

Govt Sec (G)

20%

~7% return

Blended return: 9.6% Max equity allowed: 75%

Annuity rate (%)

Rate at which corpus converts to monthly pension

% corpus for annuity

Total NPS corpus at retirement --

--Total invested

--Returns earned

--Lump sum (tax-free)

--Annuity corpus

Monthly pension

per month

Annual pension

at --% annuity rate

💰 Total tax savings over investment period

--Annual tax saved

--Total tax saved

--%Your slab

Corpus split at maturity

Lump sum (tax-free) 60%

Annuity (pension) 40%

Year-by-year NPS growth

Year	Age	Invested	Corpus	Returns

⚠️ This calculator provides estimates only. Actual NPS returns depend on fund manager performance and market conditions. Monthly pension depends on annuity plan selected at maturity. Consult a financial advisor for personalised retirement planning.

About National Pension System (NPS)

NPS is a government-regulated voluntary pension scheme. Your contributions are invested in equity, corporate bonds and government securities. At retirement (60), you withdraw 60% as tax-free lump sum and buy an annuity with 40% for monthly pension.

💰 Triple tax benefit

Section 80CCD(1): ₹1.5L under 80C limit. Section 80CCD(1B): Extra ₹50,000 exclusively for NPS — no other investment qualifies. 80CCD(2): Employer's contribution up to 10% of salary is additionally deductible.

📊 Asset allocation

Equity (E): max 75%, higher growth. Corporate bonds (C): moderate return, lower risk. Government securities (G): safest, lowest return. Auto-choice reduces equity % as you age (lifecycle approach).

🔒 Lock-in & withdrawal

NPS is locked in until 60. Partial withdrawal (25%) allowed after 3 years for specific purposes. Premature exit after 5 years: only 20% lump sum, 80% must go to annuity.

🏦 Where to open NPS

Open online at eNPS.nsdl.com or through any bank (SBI, HDFC, ICICI, Axis etc). Minimum contribution: ₹500/month (Tier I), ₹250 (Tier II). Tier II has no lock-in but no tax benefits.

Frequently asked questions

What is the NPS return rate?

NPS does not guarantee returns — they depend on market performance and asset allocation. Historically: Equity funds (E) ~10–12% CAGR, Corporate bonds (C) ~7–9%, Government securities (G) ~6–8%. A 50:30:20 E:C:G split gives roughly 9–10% blended return over long periods.

How much tax can I save with NPS?

Up to ₹2 lakh per year in NPS-linked deductions: ₹1.5 lakh under Section 80C (shared with PPF, ELSS, insurance) + additional ₹50,000 under Section 80CCD(1B) exclusively for NPS. At 30% slab, this saves ₹62,400 + ₹15,600 = ₹78,000 annually in tax.

Is NPS better than PPF for retirement?

NPS typically gives higher returns (9–11%) vs PPF (7.1%), has extra ₹50,000 tax benefit that PPF doesn't get, but is market-linked (risk) and partially locks 40% in annuity. PPF is 100% safe, fully tax-free and more flexible. Many financial planners recommend both: PPF for safety, NPS for higher growth.

What happens to NPS if I die before 60?

The entire NPS corpus is paid to the nominee as lump sum, tax-free. There is no annuity requirement. This is a key advantage of NPS — the full corpus goes to your family without the 40% annuity deduction that applies at normal retirement.