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"HAPPY BIRTHDAY-13TH OCTOBER 2017(FRIDAY) JASWINDER PAL SINGH SENIOR SPL ASSISTANT DON KALAN Jag Bhushan SR. ASST. (BANKING) AMBALA CANTT Jag Bhushan SR. ASST. (BANKING) AMBALA CANTT Om Parkash Sikri DEPUTY MANAGER ISMAILA BALDEV RAJ Addl. Associate 1 HANSLI BRIDGE, BATALA Ramesh Kumar SR. ASST. (BANKING) SME BRANCH, CHANDIGARH VEENA PACHPORE Addl. Associate 1 SEC 35-C, CHANDIGARH Ashok Kumar Goyal DEPUTY MANAGER ZONAL OFFICE HARYANA-GENERAL BANKING Kuldeep Kumar Sharma DEPUTY MANAGER ZONAL OFFICE JAMMU Jaswinder Singh SENIOR SPL ASSISTANT TRIPRI PATIALA Dalbir Singh SR. ASST. (BANKING) UDHAMPUR Ambika Chugh ASSISTANT MANAGER AMBALA CITY Sushma Gupta SR. ASST. (BANKING) CHANDI MANDIR Sushma Gupta SR. ASST. (BANKING) CHANDI MANDIR Parveen Kumar Sharma ASST. GEN. MANAGER NRI JULLUNDER HEM SINGH Addl. Associate 1 KASAULI MANJINDER SINGH RANDHAWA ASSISTANT MANAGER ANAJ MANDI, SIRHIND MANDI ASHUTOSH JAIN Addl. Associate 1 ADB MALERKOTLA DEEP CHAND MANAGER LOHAKA Raj Kumar Bhagat DEPUTY MANAGER BHOGPUR SATISH KUMAR Addl. Associate 1 AMBALA ROAD, ISMAILABAD SATISH KUMAR Addl. Associate 1 AMBALA ROAD, ISMAILABAD MUNISH BALI Addl. Associate 1 BANKING OPERATIONS DEPARTMENT-HEAD OFFICE PATIALA Nitin Soni DEPUTY MANAGER ZONAL OFFICE HARYANA-GENERAL BANKING SANJEEV BHATIA ASSISTANT MANAGER BEESLA Sudhir Kumar DEPUTY MANAGER REWARI Gurupdesh Kaur CUST. ASST. (BANKING) ROPAR PAYAL MEHTA Addl. Associate 1 GHUMAR MANDI, LUDHIANA AMIT RAJ DEPUTY MANAGER HO PATIALA -OUTREACH/FINACIAL INCLUSION DEPTT Nitin Sharma DEPUTY MANAGER(S) ROHRU AMRITA DEEPAK Addl. Associate 2 JALANDHAR ZONAL OFFICE-RO-I JALANDHAR -ADMIN JASWANT SINGH ASSISTANT MANAGER S.A. JAIN COLLEGE, AMBALA CITY Vikas Goyal CUST. ASST. (BANKING) MANSA PANKAJ KUMAR TAMTA DEPUTY MANAGER NOORMAHAL ROAD ,PHILLAUR SIMRANJEET SINGH CUST. ASST. (BANKING) SPECIALISED AGRI COMM BR, PATIALA AVINASH KUMAR Addl. Associate 1 ABLU RIGZIN GURMETH ASSISTANT MANAGER ALSINDI Deepshikha . CLERICAL - ON PROB. MOHALI (S.A.S. NAGAR) Rohit Dutta CUST. ASST. (BANKING) NEAR KHUSHI TRADES, SECTOR-11, PANCHKULA ANKIT . ASST. (BANKING) N.G.M. JIND Rohit Dutta CUST. ASST. (BANKING) NEAR KHUSHI TRADES, SECTOR-11, PANCHKULA ANKIT . ASST. (BANKING) N.G.M. JIND SUNIL KUMAR ASST. (BANKING) GHAGA Sandeep Dhillon ASSISTANT MANAGER AMRITSAR Ram . Kishan CUST. ASST. (BANKING) NAKODAR ROAD, JALANDHAR Amandeep Sharma CLERICAL - ON PROB. NANGAL BHUR *** table>

Monday, 9 March 2015

Is NPS better than EPF?



The NPS is more complicated than EPF, but it may ensure a sufficient retirement kitty
If there’s one investment option that has received generous tax breaks in the Budget, it is the National Pension System (NPS). In a watershed move, the Finance Minister has also announced that employees in the organised sector will now be able to opt out of contributions to the Employees Provident Fund (EPF) and invest in the NPS instead. So, if given this choice, what should you do? Here’s how they compare. 

Contributions

EPF contributions are mandatory for employees earning up to ₹15,000 a month in the organized sector. Many employers however insist on EPF contributions for all their employees. The contribution is pegged at 12 per cent of your pay (basic plus dearness allowance). Your statutory EPF contributions are matched by your employer. If you are an employee who usually struggles to save, the EPF is a good option for you as it forces you to save at least 12 per cent of your pay. 

But if you are targeting a comfortable retirement, note that EPF alone won’t be enough as it is pegged only to your basic pay. The NPS is a voluntary account; you can contribute anything starting from ₹500 a month (₹6,000 a year). 

To avail of the tax breaks on the investment, the maximum limit is ₹2 lakh a year. Unlike the EPF, the NPS allows you to skip contributions for a few months if you can’t afford it (investing once a year is mandatory).
So, the NPS scores over the EPF on two counts — you can save much more and do it with greater flexibility. But currently all your EPF contributions are matched by your employer. Not so for the NPS.

Portfolio

The money you pay into EPF is invested in ultra-safe options — Central and State Government securities, bonds and deposits from PSUs and a special deposit scheme from the Government. Last we know, G-Secs made up 40 per cent of the portfolio, PSU debt 32 per cent, with the deposit making up the rest of the EPF kitty. The EPF doesn’t actively manage its portfolio — it mostly buys and holds till maturity. This makes for low but predictable returns. 

The key differentiator with the NPS is that it allows you to add an equity component to your retirement kitty. You also get to flexibly allocate your money between equities (up to 50 per cent), liquid funds/bonds and Government Securities (G-Sec) in any proportion you like. 

You also have the choice of deciding who, among the six pension fund managers, will manage your money. Their individual track records are available on their websites. 

You can rejig allocations once a year and also change your fund manager. Both the equity and the debt portions of the NPS have delivered double-digit returns in the last one year. But because they are invested in market instruments, your returns will fluctuate from year to year. 

The G-Sec portion, for instance, delivered negative returns during the rising rate scenario, but is faring well with falling rates. Given that you are looking at the NPS as a long-term option, you need not worry too much about shorter term losses in the debt portfolio. Due to its portfolio structure, the NPS is likely to earn higher returns but with greater variability. 

Returns

The interest you earn on your EPF account is decided by the EPF trustees who announce the rate every year. In the last four years, interest rates have been 9.5, 8.25, 8.5 and 8.75 per cent, respectively.
The returns on NPS depend on your asset allocation as well as choice of fund manager. If you choose a 30-50 per cent equity component, returns are likely to be in the double-digits, even assuming equities manage only 15 per cent a year and debt securities 8 per cent. 

Disclosures

The EPF’s portfolio is not made public. But it is a government-backed scheme and the presumption is that it will not default on any payments. Returns are also announced and well-publicised. 

With the NPS, you know exactly where it invests, with all the managers regularly disclosing their portfolios. But unlike the EPF, gauging NPS returns is not easy. Returns earned by different plans/managers are not available at one location. You need to compile them individually from the historical NAVs put out by the different fund managers. 

So, the EPS is your best bet if you like to know exactly what you’re earning. The NPS works if you don’t mind leaving it to market forces. 

Liquidity

The EPF allows you to withdraw your money before retirement if you resign from one job and take up another, after a gap. You can also draw money from it for constructing/buying a home, illness, marriage or education of children. You can use the sums withdrawn for these purposes. 

In the NPS, if you withdraw before the age of 60, you need to compulsorily use 80 per cent of the proceeds to buy an annuity plan from an insurer. Even withdrawals after the age of 60 require you to use 40 per cent to buy an annuity. Only 60 per cent will be available to you to deploy as you please. 

The EPF is certainly more flexible than NPS on early withdrawals. But withdrawing too much or too often can leave you short of a retirement kitty when you most need it. 

Taxability

Contributions to the EPF are tax-free under Section 80C. Interest earned and withdrawals aren’t taxed either, unless you do so within five years of starting the account. 

Investments in the NPS, up to ₹2 lakh are tax-free. But the sums you withdraw at retirement are taxable at the prevailing income tax rates.

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