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NPS : ‘NPS’ is the best option for pension after retirement; Know about auto, active options in the plan NPS is the best option for pension after retirement; Know about auto, active options in the plan MIGMG News

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If you are confused about auto or active option then auto option can be helpful for you. In this option, the investment is made with risk according to the age of the investor.

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Pune : Rajesh Patil is a businessman from Pune. Even though Rajesh is 35 years old, he has not yet planned his retirement. To get pension after retirement, one of his friends applied to NPS (NPS) invest in (investment) advised to do. While Rajesh started launching online investments, Auto and Active (Active) two options emerged. However, Rajesh did not know which of these two options was beneficial. What is NPS to many people like Rajesh? And how does it work? Which option is useful for investment? It is not known. NPS was started in 2004 for government employees. After 2009 NPS scheme was opened to all. If you invest in this scheme, you can withdraw 60 percent of the accumulated amount after the age of 60 years. You get the remaining amount as pension every month.

Investment management

The amount invested in NPS is invested in fund manager equity i.e. stock market, corporate bonds, government bonds. What percentage of your investment? There are two options available for holding in equity and debt, Auto and Active. However, what option should an ordinary investor like Rajesh choose? This is difficult to understand. If you are also not aware about this, let’s know how the Auto and Active options work.

Auto option

In the auto option, the NPS fund manager takes the investment decision himself. There are three funds in NPS in auto option. The first one is the Default Moderate Life Cycle Fund. An account holder can invest a maximum of 50 percent in equity in this fund. Another is the Conservative Life Cycle Fund. 25 percent investment in equity is allowed in this fund. The third fund is the Aggressive Life Cycle Fund. 75% of the investment in this fund can be done in equity.

Active option

Under this option, how much amount and where should the investor invest? Takes a decision on this. If you choose equity option then you can allocate the investment in equity, bond or other option. Up to 75 percent can be invested in the equity option. In this option the fund manager informs you about the investment schemes. You can choose the right plan according to your risk.

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Which option is correct?

If you are confused about auto or active option then auto option can be helpful for you. In this option, the investment is made with risk according to the age of the investor. After a few days of familiarization with the market, you can choose the active option and manage the portfolio yourself, advises tax and investment consultant Balwant Jain. Active options can be great for investors who are familiar with the equity and debt markets and monitor the ups and downs of the market.

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