Returns on NPS investments are market-linked and hence depend on
the performance of the particular pension fund the subscriber invests in, as well as the asset
allocation. Unlike fixed deposits, there is no guaranteed rate of return in NPS. Historical
performance can be useful to assess how different schemes have performed in the past, but it is
not an indication of future performance.
Top performing fund managers
Lowest Management Fees (0.01%)
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Compound Growth through Equity & Bonds
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NPS returns reflect changes in the Net Asset Value (NAV) of the units held by a subscriber.
Each contribution buys units at the applicable NAV. The NAV changes with the market value of the underlying
securities. Unlike a fixed deposit, NPS does not offer a declared interest rate. Scheme performance can be measured using the Compounded Annual Growth Rate (CAGR) over one,
three, five and ten years, and since inception. These figures are not guaranteed. Past performance does not
guarantee future returns.
What is the Average NPS Return by Scheme?
NPS scheme returns are reported separately for equity (Scheme E), corporate bonds (Scheme C),
government securities (Scheme G) and alternative assets (Scheme A). The table shows Tier I returns for
Schemes E, C and G, alongside their benchmarks, as of 18 September 2026. Figures are shown only for periods
with available data.
Scheme
1 year
3 years
5 years
10 years
E, equity
Negative returns ranging from 2.77% to 9.21%
6.45% to 9.99%
7.47% to 9.22%
10.77% to 12.14%
E benchmark
Negative return of 3.95%
8.56%
8.76%
12.37%
C, corporate bonds
4.76% to 5.76%
7.23% to 7.71%
6.20% to 6.67%
7.23% to 7.85%
C benchmark
4.90%
7.05%
6.19%
7.59%
G, government securities
2.58% to 3.20%
5.85% to 6.54%
5.48% to 5.98%
6.87% to 7.63%
G benchmark
3.43%
6.75%
5.90%
6.86%
The return ranges reflect differences between asset classes. Equity returns show the widest
variation. As of this date, one-year equity returns were negative across the listed pension funds, while
ten-year returns were higher than those of Schemes C and G. Corporate bond and government securities returns
showed narrower ranges.
Returns over the long term NPS are more relevant than returns of one year. The 5 year and 10
year figures give some indication of performance under various market conditions. A weak equity year
doesn't negate past growth, but it can shrink the corpus. This is relevant for subscribers about to
retire who have their savings primarily in equities.
NPS returns are different across sectors, asset classes and investment horizons. Returns over
a longer time horizon should compare similar-length time frames, with clear definitions and methods of
calculations.
How Do NPS Fund Returns Differ Across Pension Funds?
The returns under the NPS scheme vary because the pension funds can invest in different
securities within the guidelines of the investment rules. The table presents returns for pension funds with
at least a ten-year record under Tier I Scheme E, as of September 18 2026.
Pension fund
5 years
10 years
Since inception
HDFC Pension
8.25%
12.14%
13.41%
ICICI Prudential Pension
9.22%
12.05%
12.05%
Kotak Mahindra Pension
8.86%
11.90%
11.41%
UTI Retirement Solutions
8.75%
11.62%
11.80%
LIC Pension
8.05%
10.85%
11.75%
SBI Pension Funds
7.47%
10.77%
10.31%
No pension fund leads across every period. HDFC Pension has the highest ten-year return in
this table, while ICICI Prudential Pension has the highest five-year return. Funds without a ten-year record
are excluded from the comparison.
How Do NPS Tier 1 Returns Compare With Tier 2?
Tier I and Tier II returns depend on the selected pension fund, scheme and investment period.
Returns may differ even when both accounts invest in the same asset class. Compare the same scheme and
period for a meaningful assessment.
The main differences between Tier I and Tier II account concern withdrawals and tax
treatment. Tier I has regulated exit and partial withdrawal rules whereas withdrawals in Tier II are allowed
at any time. For the majority of subscribers, Tier II has fewer tax advantages than Tier I. Regular
withdrawals may deplete the balance as well as the ability to earn compound interest in the future.
Where Can You Check NPS Trust Returns?
NPS Trust publishes returns by scheme and tier. Its returns information includes dated
snapshots and monthly scheme data. Pension fund information and the Central Recordkeeping Agency (CRA)
statement can also help subscribers check NAV and performance.
Check the "returns as of" date before using any figure. Older tables may not
reflect current performance, as market-linked returns change over time.
What Factors Affect NPS Returns?
Five factors explain most of the gap between one subscriber's return and another's.
Asset allocation: The split between E, C, G and A drives risk and return more than any
other choice
Pension fund manager: Different security selections can lead to different returns
within the same scheme.
Market conditions: Interest rates, inflation, GDP growth and equity valuations move the
NAV
Costs: Investment management fees vary by subscriber sector and assets under
management. From 1 April 2026, rates range from 0.03% to 0.09% for Government Sector subscribers and
0.04% to 0.12% for Non-Government Sector subscribers.
Time in the market: Regular contributions buy units at different prices over time,
although they do not eliminate market risk.
Asset allocation will vary according to the type of investment and the relevant rules. Based
on Active Choice in the All Citizen Model, Tier I has an equity allocation of 75% and Tier II has an equity
allocation of 100%. Under Auto Choice, the equity allocations change as the participant ages, according to
the chosen life-cycle option.
Auto Choice Option
Starting Equity Allocation
Life Cycle 25- Low
25% up to age 35, reducing to 5% at age 55 and above
Life Cycle 50- Moderate
50% up to age 35, reducing to 10% at age 55 and above
Life Cycle 75- High
75% up to age 35, reducing to 15% at age 55 and above
Life Cycle- Aggressive (35E/55Y)
50% up to age 45, reducing to 35% at age 55 and above
How Are NPS Returns Calculated?
The performance of an account is linked to the funds that are available in it and their
subsequent performance over time. An NPS
calculator projects the future corpus based on the monthly contribution, investment period and
assumed return.
The table illustrates the impact of rate of return on the final outcome if one invests ₹5,000
on a monthly basis and compounding occurs monthly. These are illustrations and not predictions.
Assumed return
Corpus after 20 years
Corpus after 30 years
8% a year
₹29,45,102
₹74,51,797
10% a year
₹37,96,844
₹1,13,02,440
12% a year
₹49,46,277
₹1,74,74,821
Total contributions amount to ₹12,00,000 over 20 years and ₹18,00,000 over 30 years. At 30
years, the projected corpus differs by more than ₹1 crore between the 8% and 12% scenarios.
Note: These illustrations assume fixed monthly contributions at the end of
each month and a constant annual return compounded monthly. Actual NPS returns fluctuate with market
conditions, so the projected corpus is not guaranteed.
How Are NPS Returns Taxed?
Tier I offers specific tax benefits, subject to applicable conditions. Tier II does not
receive the same tax treatment. The tax treatment of withdrawals depends on the applicable provisions, while
annuity income is taxable at the subscriber's applicable tax rate.
How to Interpret NPS Return Figures?
NPS return figures are more useful when compared in context. The following checks can help
you evaluate NPS returns.
Compare the same scheme, tier and period across pension funds
Consider five-year and ten-year returns alongside one-year returns
Compare each pension fund with its benchmark, not just with other funds
Review the portfolio periodically instead of reacting to monthly movements.
Manage Your NPS Account With PensionBazaar
PensionBazaar is a PFRDA-registered Point of Presence under registration number
POP-317032020. Eligible subscribers can open an NPS account online, subject to applicable registration and
KYC requirements. Existing subscribers can link their PRAN and review their retirement plans with a
retirement planning expert.
Mistakes to Avoid When Evaluating NPS Returns
The following are the mistakes to avoid when you're evaluating NPS returns.
Selecting a pension fund for its highest one-year return
Using an old returns table without verifying what date the table was reporting from
Assuming past returns will continue at the same rate
Keeping a high equity allocation until close to retirement without factoring in risk tolerance and time
to retirement
Comparative analysis between TIER I and fixed-rate products' performance, ignoring market risk.
Are NPS Returns Enough for Your Retirement Goal?
While NPS returns can surely help with retirement planning, they must be considered alongside
other factors. The final corpus will depend on the beginning of contributions, the amount contributed, the
length of time money is contributed and the returns generated. Calculate the target corpus first, then
determine if the planned contributions and investment allocation can meet it. To start investing, open an NPS account online with PensionBazaar to choose a pension fund
manager and the asset allocation according to your investment goals and risk appetite.
FAQs on NPS Returns
Q. What are
NPS returns?
NPS returns are the gains on contributions, measured by the change in the NAV of
the units you hold. They are market-linked and not fixed. The scheme, the pension fund and the
time period all change the result.
Q. What is the
average NPS return?
There is no single average return for all NPS subscribers. Returns depend on the
scheme, pension fund, asset allocation and investment period. Historical returns do not
guarantee future performance.
Q. What is NPS
Equity?
As of September 18, 2026, the ten-year performance of each applicable pension
fund in Scheme E, Tier I is between 10.77% and 12.14%. The one-year returns were negative.
Q. Is the
return on NPS guaranteed?
NPS returns are not guaranteed. They depend on market performance and on
portfolio allocation and on the selected pension fund. The value of an investment may go down as
well as up.
Q. Are Tier I
and Tier II Returns the Same?
Not necessarily. Returns vary depending on the pension fund, investment scheme
and period compared. Returns in Tier I and Tier II accounts may vary due to different investment
options.
Q. Where can I
check NPS Trust returns?
The NPS Trust website has a "Returns under NPS" page with a weekly snapshot and a
monthly scheme data section. Pension fund websites and your CRA statement also show NAV and
performance, always with an "as on" date.
Q. Which NPS
scheme gives the highest return?
The highest-returning NPS scheme depends on the investment period and the figures
being compared. Scheme E has higher ten-year returns than Schemes C and G in the table above.
But past performance does not guarantee future performance, and which scheme is appropriate
depends on the subscriber's investment horizon and risk tolerance.
Q. How are NPS
returns taxed?
Tier I offers specific tax benefits, subject to applicable conditions. Tier II
does not receive the same tax treatment. Withdrawal exemptions depend on the applicable
provisions, while annuity income is taxable at the subscriber's applicable tax rate.
Q. Can I
improve my NPS returns?
Regular contributions with a relatively long investment horizon and an early
start, contribute to sound retirement savings in the long run. Another method for evaluating
performance is to compare the pension fund to its benchmark
27 Oct 2026 
