NPS - Is it a good choice? (If liquidity is not an issue)

[felipesaron]

@giobob NPS enjoys legal protection from court attachment. That's a very good point in its favor.
https://www.livemint.com/money/pers...tion-from-court-attachment-1556706885816.html

 

[giobob]

@felipesaron Thanks for pointing this out. These are some of the pointers that don't actually brought up in usual conversation about NPS.

This makes it a viable option for anyone who has to go through bankruptcy or divorce proceedings

 

[jwilder9]

@felipesaron Maalya and Neerav Modi should have invested in NPS

 

[lookingforadvice1]

@felipesaron Thanks for this. I had kept my pf contribution to the bare minimum and was heavily into equity mfs but this has made me rethink that.

 

[pinkrain]

@giobob If liquidity and Annuity clause doesn't apply, it is a cheap customized hybrid fund.

• it is not good for someone who actively invests on individual stocks and stock traders.
• regret of missed opportunities where the locked amount could be put to work.
• you can pay tax and spend money however you want.

 

[wilddaisy]

@pinkrain Yep. Imo they should give us the option of having an nps demat account where we can invest in equities and etfs like a regular demat account. Anything that's sold goes into that nps "wallet" which we can use to buy other funds or keep in the wallet if we want. That will be a useful option for some investors. It's only a nice to have feature though, not as important as early withdrawal with penalties and removal of annuities.

 

[katedaring52]

@wilddaisy Correct me if I'm wrong, but this sounds similar to a Roth IRA from the US?

 

[resjudicata]

@katedaring52 That's correct.

 

[resjudicata]

@wilddaisy Thrz a NPS-T2 option

 

[wilddaisy]

@giobob That's it for me really. I don't want the annuity and lock in. If I can withdraw early (charge taxes as a penalty no problem) and remove the forced annuity as a requirement then I'll invest. My company also offers this corporate tax free nps plan.

 

[fishyjoe]

@wilddaisy I have fallen into that corporate nps plan. What's the procedure to withdraw? Can I withdraw in this year or I will have to wait for a year?

 

[wilddaisy]

@fishyjoe I don't know. I haven't opted for it yet.
But I don't think you can withdraw until 60.

 

[fishyjoe]

@wilddaisy I meant stop investments when I said withdraw.

 

[ajgray71]

@fishyjoe It differs between employers. Most allow it be to be modified every month.

 

[andy316]

@giobob I started late in NPS (personal : 2018, employer : 2020) but since it saves 30% tax, maximising it with 50k personal and 10% employer. Although I was buoyant about NPS but now I am sceptical since the returns on normal MF may be better in long run. Personally I prefer something which has lockin period of a long time and I am positive that NPS will have more/better withdrawal options in future.

 

[gloria12]

@giobob Max (extra) tax break you get from NPS is 50K i think. So 10K per month is a bit much.

However, in specific cases, it makes sense to put some money in NPS. It is a good investment option for a lot of people.