Recently, NPS has started giving negative returns, due to which people are leaving NPS and shifting to PPF and EPF. In such a situation, the question arises whether you should shift to PPF and EPF now? So let us explain to you in detail.
Is this the right time to invest in PPF, EPF, should you invest now?
PPF Vs NPS: If you want to invest for retirement, then these two schemes can give you very good returns. Public Provident Fund (PPF), and National Pension Scheme (NPS). Both these schemes are very popular among the salaried class people.
By the way, with the beginning of your career, you should plan for your retirement, because only then the investment made will be useful to you in old age. But if you start investing even after 4-5 years of starting the job then it is also good. In this case, you get a chance to invest for about 25 years.
But, recently NPS has started giving negative returns, due to which people are leaving NPS and shifting to PPF and EPF. In such a situation, the question arises whether you should shift to PPF and EPF now? So let us explain to you in detail.
Public Provident Fund (PPF) and National Pension Scheme (NPS), both the schemes are supported by the Central Government. The basic difference between PPF and NPS is that PPF gives a fixed return and NPS is linked to market returns. Being linked to the market means that the risk can be high and the returns can also be high.
Should you switch to PPF and EPF
The volatility of NPS is generally compensated by the debt segment of the National Pension System. However, currently NPS is giving less returns as compared to other schemes. In such a situation, many investors are getting attracted towards EPF and are shifting there after seeing good returns in PPF.
According to Investor Advisor, NPS is a mix of equity and debt and is a good option for retirement funds. Whereas, to invest in PPF account, you have to invest for 15 years, on which you get interest on compounding.
According to investors, comparing the returns of EPF with the returns of NPS would not be the right decision. Do not compare EPF interest rate with NPS returns as EPF is also a 100% debt instrument like PPF. However, one can opt for Voluntary Provident Fund (VPF) to add more monthly contribution to his/her EPF account.
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