FAQs on Investment Options

  • What are the fund options available under NPS?
  • Can a subscriber invest 100% of contribution to Equity Fund?
  • Can a subscriber invest 100% in Government Securities or Corporate Bond Fund?
  • Can a subscriber select different Asset Allocation Pattern for Tier – 1 and Tier – 2 NPS Accounts?
  • What are various Investment Choices available under NPS?
  • What happens if the exposure in Equity Fund crosses the 50% threshold at any given point of time under Active Choice Scheme Preference option?
  • What are the investment options available for an individual investing in NPS?

Below mentioned three fund options (also known as asset classes) are available under NPS:

  1. Equity Fund (E)
  2. Government Securities Fund (G)
  3. Fixed Income Instruments other than Govt. Securities (C)

Under Equity Fund option, subscriber is allowed to invest only up to 50% of contribution amount.

Yes, subscriber can invest 100% of contribution to Government Securities or Corporate Bond Fund.

Yes. Subscriber can have different asset allocation patterns for both the accounts.

NPS offers two Investment Choices to subscribers – Active Choice and Auto Choice.

  1. Active Choice: Under this option, subscriber selects the allocation pattern amongst the three funds E, C and G
  2. Auto Choice: Under this option, subscriber funds are automatically allocated amongst three funds E, C and G in a per pre-defined portfolio pattern prescribed by PFRDA
Age E (%) C (%) G (%) Age E (%) C (%) G (%)
< = 35 50 30 20 46 28 19 53
36 48 29 23 47 26 18 56
37 46 28 26 48 24 17 59
38 44 27 29 49 22 16 62
39 42 26 32 50 20 15 65
40 40 25 35 51 18 14 68
41 38 24 38 52 16 13 71
42 36 36 41 53 14 12 74
43 34 22 44 54 12 11 77
44 32 21 47 > = 55 10 10 80
45 30 20 50

As the subscriber grows old, the investment is shifted more towards secured fund option – Government Securities.

In case of excessive market performance where corpus in Equity Fund breaches the 50% threshold, system driven Auto – Rebalancing of Portfolio technique is carried out on next date of birth of the subscriber.

With this technique, units worth excessive corpus is redeemed from the Equity fund corpus of the subscriber and allocated to other Funds (Government Securities and Corporate Bonds) in the same pattern as last selected by the subscriber.

Three fund options available under NPS are:

  • Equity Fund (E)
  • Government Securities Fund (G)
  • Fixed Income Instruments other than Govt. Securities (C)

A subscriber is also able to invest 100% of contribution to Government Securities or Corporate Bond Fund.

Additionally, NPS offers two Investment options to subscribers – Active Choice and Auto Choice.

  • Active Choice: Under this option, subscriber selects the allocation pattern amongst the three funds E, C and G
  • Auto Choice: Under this option, subscriber funds are automatically allocated amongst three funds E, C and G in a per pre-defined portfolio pattern prescribed by PFRDA (Pension Fund Regulatory and Development Authority)
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