{"id":3085,"date":"2022-04-12T16:51:19","date_gmt":"2022-04-12T16:51:19","guid":{"rendered":"https:\/\/cms.lxme.in\/apy-or-nps-which-is-better\/"},"modified":"2024-07-18T09:11:00","modified_gmt":"2024-07-18T09:11:00","slug":"apy-vs-nps-which-is-better","status":"publish","type":"post","link":"https:\/\/lxme.in\/v1\/apy-vs-nps-which-is-better\/","title":{"rendered":"APY vs NPS: Understanding the Difference and Choosing the Best Pension Scheme"},"content":{"rendered":"\n<p><strong>APY vs NPS<\/strong> is a comparison of two major pension programs in India. APY stands for Atal Pension Yojana, and NPS is for National Pension System. Both initiatives are intended to provide financial security to Indian residents after they retire. In this comparison, we will look at the differences between APY and NPS, as well as its features, benefits, and downsides.<\/p>\n\n\n\n<p>Setting money aside for your retirement is an important step. Retirement planning is important because it can help you avoid running out of money in retirement.<\/p>\n\n\n\n<p>One can use the <strong><a href=\"https:\/\/lxme.onelink.me\/95JV\/retirementcalculator5\" target=\"_blank\" data-type=\"post\" data-id=\"3820\" rel=\"noreferrer noopener\">LXME Retirement Calculator\u00a0<\/a><\/strong> to determine the amount of money required to save for their own retirement. Besides that, the government has introduced various schemes for the purpose of retirement &amp; two among them are Atal Pension Yojana &amp; National Pension Scheme. Both APY and NPS are regulated by <strong>Pension Fund Regulatory &amp; Development Authority (PFRDA).<\/strong><\/p>\n\n\n\n<p>So, if you&#8217;ve landed on this page because you&#8217;ve been searching for&nbsp;<strong>Atal Pension Yojana<\/strong> versus <strong>National Pension Scheme<\/strong> to see which one is better, then this is the best you could ask for!<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_75 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/lxme.in\/v1\/apy-vs-nps-which-is-better\/#What_is_Atal_Pension_Yojana\" >What is Atal Pension Yojana?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/lxme.in\/v1\/apy-vs-nps-which-is-better\/#Features_of_APY_%E2%80%93\" >Features of APY \u2013<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/lxme.in\/v1\/apy-vs-nps-which-is-better\/#What_is_the_National_Pension_Scheme\" >What is the National Pension Scheme?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/lxme.in\/v1\/apy-vs-nps-which-is-better\/#Features_of_NPS_%E2%80%93\" >Features of NPS \u2013<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/lxme.in\/v1\/apy-vs-nps-which-is-better\/#Can_I_have_APY_and_NPS_both\" >Can I have APY and NPS both?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/lxme.in\/v1\/apy-vs-nps-which-is-better\/#Which_investment_is_better_than_NPS\" >Which investment is better than NPS?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/lxme.in\/v1\/apy-vs-nps-which-is-better\/#Which_investment_is_better_than_NPS_Is_APY_tax-free\" >Which investment is better than NPS? Is APY tax-free?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/lxme.in\/v1\/apy-vs-nps-which-is-better\/#To_know_more_about_APY_and_NPS_you_can_watch_these_videos_below_APY_%E2%80%93_Atal_Pension_Yojana\" >To know more about APY and NPS you can watch these videos below:   APY &#8211; Atal Pension Yojana<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/lxme.in\/v1\/apy-vs-nps-which-is-better\/#NPS_%E2%80%93_National_Pension_System\" >NPS &#8211; National Pension System<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Atal_Pension_Yojana\"><\/span><strong>What is Atal Pension Yojana?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It is a pension scheme launched by the Government of India mainly focused on the unorganized sector workers with an aim to provide a minimum guaranteed pension after the age of 60 years depending on their contributions.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Features_of_APY_%E2%80%93\"><\/span><strong>Features of APY \u2013<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>Defined benefits \u2013 <\/strong>Atal Pension Yojana is a defined pension plan. After attaining the age of 60, it provides a guaranteed minimum pension of \u20b9 1,000\/-, \u20b9 2,000\/-, \u20b9 3,000\/-, \u20b9 4,000\/-, \u20b9 5,000\/- each month, depending on the contributions made by the subscribers.<\/p>\n\n\n\n<p><strong>The number of accounts &amp; nominations <\/strong><strong>&#8211;<\/strong> Only one APY account can be opened by the subscriber and it is mandatory to provide nominee details in the APY account.<\/p>\n\n\n\n<p><strong>Withdrawal in an unfortunate event &#8211; <\/strong>Premature exit is only allowed in case of critical illness\/death.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If the subscriber dies before the age of 60, the spouse will have an option to either continue making contributions or withdraw the entire accumulated corpus.<\/li>\n\n\n\n<li>In case of death of the subscriber(after the age of 60), the spouse will continue to receive the pension until death. Post that, the pension wealth will be paid to the nominee.<\/li>\n<\/ul>\n\n\n\n<p><strong>Tax Benefits &#8211;<\/strong>&nbsp; A tax deduction for contributions made is available up to a maximum of \u20b9 2,00,000 under Section 80CCD(1) and Section 80CCD (1B) of the Income Tax Act in each financial year.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_National_Pension_Scheme\"><\/span><strong>What is the National Pension Scheme?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>National Pension Scheme (NPS) is a pension cum investment scheme launched by the Government of India to provide security at the time of retirement to Citizens of India. It is an attractive long-term saving avenue to effectively plan your retirement through investing in different asset classes available under NPS. One can open two types of accounts under NPS: Tier I Account and Tier II Account.<\/p>\n\n\n\n<p>A subscriber of Tier I is required to make a minimum contribution of \u20b9 1000 in a financial year whereas there is no minimum balance required for Tier II Account.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Features_of_NPS_%E2%80%93\"><\/span><strong>Features of NPS \u2013<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>Flexibility &#8211; <\/strong>Investors can select the asset classes according to the options available, select the Pension Fund Managers as per their wish and make investments at any time of the year.<\/p>\n\n\n\n<p><strong>Economical &#8211;<\/strong> NPS is a low-cost product compared to other investment instruments offering such features.<\/p>\n\n\n\n<p><strong>Tax Benefits &#8211;<\/strong> A tax deduction for contributions made is available up to a maximum of \u20b9 2,00,000 under Section 80CCD(1) and Section 80CCD (1B) of the Income Tax Act in each financial year.<\/p>\n\n\n\n<p><strong>Returns &#8211;<\/strong> NPS offers market-linked returns and the investor has an option to change the pension fund manager once a year if they are not satisfied with the performance of the fund.<\/p>\n\n\n\n<p><strong>Premature Withdrawal &#8211; <\/strong>It is mandatory for an investor to invest in NPS till the age of 60 years. However, partial withdrawals of up to 25% of the contributions made are allowed after 3 years from the date of account opening. And this restriction is applicable only for Tier I Accounts.<\/p>\n\n\n\n<p><strong>Withdrawal at 60 years &#8211;<\/strong> In Tier I, the investor has to take an annuity of at least 40% of the accumulated corpus and the rest can be withdrawn as a lump sum. However, there is no lock-in for NPS Tier II.&nbsp;<\/p>\n\n\n\n<p>Related Article You may Like :- <a href=\"https:\/\/lxme.in\/right-time-to-withdraw-your-investments\/\" target=\"_blank\" rel=\"noreferrer noopener\"> Right time to withdraw your investments?<\/a><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>FAQs \u2013 Common Questions on APY vs NPS<\/strong><\/p>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-question-1695281003631\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"Can_I_have_APY_and_NPS_both\"><\/span><strong>Can I have APY and NPS both?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Yes, you can have both APY and NPS accounts simultaneously. However, you need to meet the eligibility criteria for each scheme and maintain the minimum contribution amount for each account.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1695281023788\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"Which_investment_is_better_than_NPS\"><\/span><strong>Which investment is better than NPS?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>There is no one-size-fits-all answer to this question as the best investment option depends on your financial goals, risk appetite, and investment horizon. However, some investment options that can be considered as alternatives to NPS are Public Provident Fund (PPF), Equity-Linked Savings Scheme (ELSS), and Unit-Linked Insurance Plan (ULIP).<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1695281067674\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"Which_investment_is_better_than_NPS_Is_APY_tax-free\"><\/span><strong>Which investment is better than NPS? Is APY tax-free?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>The contributions made towards APY are eligible for tax benefits under Section 80CCD of the Income Tax Act, 1961. However, the pension received from APY is taxable as per the income tax slab of the individual. In the optimized format, the answers are presented in a concise and easy-to-read format using bullet points.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"To_know_more_about_APY_and_NPS_you_can_watch_these_videos_below_APY_%E2%80%93_Atal_Pension_Yojana\"><\/span>To know more about <strong>APY and NPS <\/strong>you can watch these videos below: <br><br>APY &#8211; Atal Pension Yojana<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<iframe width=\"716\" height=\"403\" src=\"https:\/\/www.youtube.com\/embed\/bpElDTbg2BY\" title=\"Explained: Atal Pension Yojana | \u0915\u093f\u0938\u0915\u0947 \u0932\u093f\u090f \u0938\u0939\u0940 \u0939\u0948 \u0905\u091f\u0932 \u092a\u0947\u0902\u0936\u0928 \u092f\u094b\u091c\u0928\u093e? | Hindi\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" allowfullscreen><\/iframe>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"NPS_%E2%80%93_National_Pension_System\"><\/span>NPS &#8211; National Pension System<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<iframe width=\"320\" height=\"560\" src=\"https:\/\/www.youtube.com\/embed\/mlMfeZwPGsA\" title=\"But what is PPF? NPS? and all these terms?\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" allowfullscreen><\/iframe>\n\n\n\n<p>To stay connected with <a href=\"https:\/\/www.financialexpress.com\/market\/cafeinvest-great-time-to-invest-money-anand-rathi-backed-lxme-tells-two-most-crucial-things-to-remember-interview-1941716\/\" target=\"_blank\" rel=\"noreferrer noopener\">LXME<\/a> and access inspiring content, follow us on&nbsp;<a href=\"https:\/\/www.instagram.com\/lxmeofficial\/\" target=\"_blank\" rel=\"noreferrer noopener\">Instagram&nbsp;<\/a>and subscribe to our&nbsp;<a href=\"https:\/\/www.youtube.com\/@LXMEofficial\" target=\"_blank\" rel=\"noreferrer noopener\">YouTube channel<\/a>.<\/p>\n\n\n\n<p><strong>Share this blog with your family and friends if you find it insightful!!<\/strong><\/p>\n\n\n\n<p><strong>Download the&nbsp;<a href=\"https:\/\/lxme.onelink.me\/95JV\/lxmewebsite\" target=\"_blank\" rel=\"noreferrer noopener\">LXME app<\/a>&nbsp;now to start investing!<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>APY vs NPS is a comparison of two major pension programs in India. APY stands for Atal Pension Yojana, and NPS is for National Pension System. Both initiatives are intended to provide financial security to Indian residents after they retire. In this comparison, we will look at the differences between APY and NPS, as well <a href=\"https:\/\/lxme.in\/v1\/apy-vs-nps-which-is-better\/\" class=\"more-link\">&#8230;<span class=\"screen-reader-text\">  APY vs NPS: Understanding the Difference and Choosing the Best Pension Scheme<\/span><\/a><\/p>\n","protected":false},"author":6,"featured_media":5481,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[651],"tags":[203,60],"class_list":["post-3085","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-retirement","tag-pensionfunds","tag-retirement"],"acf":[],"_links":{"self":[{"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/posts\/3085","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/comments?post=3085"}],"version-history":[{"count":9,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/posts\/3085\/revisions"}],"predecessor-version":[{"id":7586,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/posts\/3085\/revisions\/7586"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/media\/5481"}],"wp:attachment":[{"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/media?parent=3085"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/categories?post=3085"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/tags?post=3085"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}