If a person starts planning for retirement early in their career, they can live a comfortable and stress-free life in old age. For this, it is important to create a good investment plan from the beginning of their career so that enough money is saved by the time they retire. NPS, EPF, and Mutual Funds offer this opportunity. Let’s take a look at which one is the best for investment.

How Much Can You Earn by EPF

EPF (Employees’ Provident Fund) is a saving plan for workers in companies with 20 or more employees. The worker and the employer both put 12% of the salary every month. The government gives interest, now it is 8.25% per year. EPF is safe and tax-free. You do not pay tax on money put in, interest earned, or money taken out.

But EPF is not easy to take out. You can only take money if you lose your job, want to buy a house, or have a medical problem. EPF is good for people who want safe and stable returns. You can also save tax up to Rs 1.5 lakh under Section 80C.

National Pension System (NPS)

NPS is a voluntary government plan. Any Indian citizen from 18 to 70 years old can invest. Even NRIs can invest. You can choose to put money in stocks, bonds, or government securities. NPS gives 8% to 10% return per year.

You cannot take money from NPS before age 60. But it gives good tax benefits. You can save Rs 1.5 lakh under Section 80C and extra Rs 50,000 under Section 80CCD(1B). It is better to add more money regularly to grow your pension.

Mutual Funds

In mutual funds, you can choose equity funds, debt funds, or hybrid funds. Long-term equity funds can give 10% to 15% returns per year. Equity funds grow fast, hybrid funds give balance, debt funds are safe.

You can save tax up to Rs 1.5 lakh in ELSS funds under Section 80C. But taking out money may be taxable. You can also invest in mutual funds using SIPs.

Best Choice for Investment

  1. SIP (Mutual Fund): 10%–15% return, high risk, easy to take out.
  2. NPS: 8%–10% return, medium risk, some limits on taking out, good tax saving.
  3. EPF: 8.25% return, safest, hard to take out, best tax saving.
  4. EPF is safest, NPS gives good balanced returns, SIP can give high returns but risk is high.