I would like to know if NPS is worth investing? I apprehend that this is not going to help me during my old age. I also find its operations are not user friendly and there are no clear instruction on its websites regarding customer service.
D. Lepcha, Siliguri
NPS is a retirement product and you have to weigh in the pros and cons before investing in the scheme. The benefits are — NPS allows access to multiple different asset classes — equity, corporate bonds, government securities, thus shielding against volatility in one particular asset class. There is flexibility to switch between actively managed and automatically managed and also the option to choose between 10 fund managers. If you are in the old tax regime, there is an additional deduction of up to ₹50,000 under section 80CCD(1B) of the Income Tax Act over and above the ₹1.5 lakh limit under section 80C. But there are certain disadvantages. At maturity, only 60 per cent of the corpus can be withdrawn and the remaining 40 per cent of the corpus is used towards purchase of annuity. Premature exit is available after 5 years and partial withdrawal for specific purposes is available after 3 years. If the liquidity requirement is high, then NPS may not be a suitable product. Systematic investment in mutual funds may garner better returns, more choice (including pension focused funds) and more control over the investments. But there is also higher risk and tax on capital gains. If capital protection is important, then there are short term alternatives like MIS and long term alternatives like PPF as well. Regarding NPS customer service, there is a WhatsApp number for query resolution available on the NPS Trust website.
If you have opened the NPS account through Protean, there is an online grievance redressal service on their website.