NPS vs Mutual Funds: How to pick better option, become rich as retirement kicks-in
NPS vs Mutual Funds: Amid extremely volatile stock market, investors are getting confused as to whether they should invest in those funds that are government backed or in equity MFs.
NPS vs Mutual Funds: Amid extremely volatile stock market, investors are getting confused as to whether they should invest in those funds that are government backed or in equity MFs. The situation becomes trickier when the investor is about to retire in next 10 years and wants to invest a lumpsum amount to get a whopping retirement fund at the time of superannuation. Speaking on the matter Vivek Karwa, CEO at Vridhi Money Managers said that for a lumpsum amount to be invested for next 10 years, mutual funds investment is better option than National Pension Scheme (NPS).
Batting in favour of Mutual Funds ahead of NPS for a lumpsum amount investment for next 10 years Vivek Karwa spoke in Mutual Fund Helpline, "For a lumpsum amount investment for next 10 years, mutual funds investment is much better option than NPS account opening. A 10-year mutual funds investment is considered long-term investment and for long-term investment, mutual funds are always advisable ahead of the NPS or any other government-backed small saving schemes."
See Zee Business Live TV streaming below:
On what kind of mutual funds will be suitable for a lumpsum investment having 10-year time-horizon, Karwa said that multi-cap mutual funds would be a better option as it is bunch of all types of mutual funds. He said that such confusion has started to arise among the investors because of the lower expense ratio in the NPS but he strongly batted for multi-cap mutual funds investment ahead of NPS as the difference of return between the NPS and multi-cap mutual funds would be around 4-5 per cent, while the expense ratio margin is around 1.5 per cent.
Watch full coverage in video below:
— Zee Business (@ZeeBusiness) September 3, 2020
On why Karwe is batting in favour of multi-cap mutual funds instead of NPS accounts, the CEO at Vridhi Money Managers said that NPS is like equity mutual funds while multi-cap is purely mutual funds. In NPS, the fund manager mainly invests in Nifty stocks while in multi-cap mutual funds, the fund manager is free to choose any stock. this makes a big difference in returns and hence it's advisable to invest in multi-cap mutual funds for next 10 years.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.