EPFO vs NPS- As long as you are earning, there is no tension about expenses. But when you retire, it is important to prepare for the expenses after that. You need to do this preparation during your earning period and that too very early. Otherwise, the more time passes by, the less funds you will be able to create for retirement.

There are many options for creating a retirement fund (Best Retirement Plan), out of which 3 are more popular. These include National Pension Scheme (NPS) and Employee Provident Fund or EPF. But let us know which of these will be best for you.

EPF is government guaranteed

EPF is a long-term scheme. This option is for salaried people, in which both the employee and the employer deposit 12-12% of the employee’s salary in his PF account. In this scheme with 8.25 percent annual interest, the investment made, the interest received on it and the withdrawal amount are not taxed. This could be the best option for those who want tax saving maturity amount on retirement without any risk.

NPS is a market linked scheme

Any Indian can invest in the government retirement scheme NPS. The special thing is that NPS is a market linked scheme. Therefore, it is better for those investors who can take a little risk. You can also get tax benefits in this. But keep in mind that the investment made in it remains locked-in till the age of 60 years. After that you will be able to withdraw some money.

What are the other benefits of EPF-NPS

At the time of EPF, all the money is received together. You can keep only the required amount from it and invest the rest of the money as per your convenience. NPS provides monthly pension, which will be a great source of income after retirement. There will also be the benefit of tax saving in it

What is the conclusion?

If you can take risk with the expectation of higher returns, then choose SIP. Those who are risk averse should choose EPF. You can also increase your contribution to EPF. NPS is the best for saving tax and getting pension. You can choose any of the three options according to your choice and comfort.

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