All you want to know about NPS:Investors earn a whopping 13% return from the retirement scheme, Sitharaman spills the beans

On the occasion of NPS Diwas, the authorities had launched the Multiple Scheme Framework (MSF). According to news agency ANI, experts highlighted that now, pension funds can create their own schemes. This will open up more options for subscribers. This is the first time pension funds have been allowed to launch a scheme. Lets see what is MSF? According to ANI, CEOs of Axis Pension Fund and HDFC Pension Fund said that under MSF, they will be allowed to launch their own schemes. Plus, they will also be allowed to invest 100% of money in equities. What is NPS? NPS is a government-backed retirement savings scheme where you can contribute regularly, and your money grows over time. Key Features of NPS: Easy to Join: Opening an NPS account is simple and can be done both online or physically through designated banks and financial institutions. Professional Management: Your money is managed by government assigned professional fund managers who invest it in a mix of assets like stocks, government bonds, and corporate bonds. Tax Benefits: NPS offers tax benefits on your contributions, reducing your taxable income and helping you save more. NPS offers two types of accounts: Tier 1 and Tier 2. Here’s the difference: Tier 1 Account: This is the primary account for retirement savings. It has some restrictions on withdrawals. It is mandatory for people to open this account to start investing in this miraculous scheme. Tier 2 Account: This is a voluntary savings account that you can open in addition to your Tier 1 account. It offers more flexibility, allowing you to withdraw your money whenever you need it. Tier 1 vs Tier 2 Accounts: How Your Money is Invested? The contributions are invested by Pension Funds in following asset classes: Asset class E – Equity shares of companies traded in Futures and Options segment Asset Class C – Listed Corporate Bonds / Debentures Asset Class G – Government securities and State Development Loans Asset Class A – Alternate Assets When you invest in NPS, your money is allocated to different asset classes based on your investment choice. You can choose between: Active Choice: You get to decide how much of your money goes into stocks, corporate bonds, and government bonds. Auto Choice: Your money is automatically allocated based on your age and risk profile. As you get elder, more of your money is shifted to safer investments like bonds. Investment Choice – Asset allocation pattern a. Active Choice i. Equity (E) – Maximum 75% ii. Corporate Bonds (C) – Upto 100% iii. Government Securities (G) – Upto 100% iv. Alternate Assets (A) – Maximum 5% b. Auto Choice i. Conservative Life Cycle Fund (LC25) ii. Moderate Life Cycle Fund (LC50) – Default iii. Aggressive Life Cycle Fund (LC75) Returns on NPS Investments: On the occasion of NPS Diwas, the Union Finance Minister Nirmala Sitharaman said to ANI, “The schemes under NPS have generated attractive returns. The average annual returns since inception under the equity scheme have been over 13 per cent, and around 9 per cent for both Corporate Debt and Government Securities schemes.” How many NPS subscribers are there in the country? As of August 31, 2025, the NPS Trust reported approximately 68.13 million (6.81 crore) total NPS subscribers.