The National Pension System, Employees’ Provident Fund and Public Provident Fund are the three primary instruments for the middle-class people of India to build a sizeable corpus for their advanced years. Let’s have a look as to what might be the amounts they can generate for an investor with an investment of Rs 10,000 a month over a long period of 15 years.
National Pension System calculator
Let’s assume a person is 45 years old. He/she begins investing Rs 10,000 a month in an NPS account for 15 years – till the age of 60. In this case, the NPS contributor will get a monthly pension of Rs 8,358. Besides this, he/she would get a lump sum of Rs 25,07,456 or Rs 25.07 lakh.
The NPS is expected to build a total corpus of Rs 41,79,243 (Rs 41.79 lakh) for the contributor of which his own nominal contribution is Rs 18 lakh. The assumption that has been made in this calculation is that there will be a 10% annual increase in the investment for 15 years and 40% of the corpus will be retained for pension payments. A return of 6% has been assumed on the amount reserved for annuity.
EPF calculator
The Employees’ Provident Fund is not a market-linked instrument and the contributions here are defined by the rules while the rate of interest is fixed by the Employee’s Provident Fund Organisation. Now to ensure a monthly contribution of Rs 10,000 to the EPF account only, one should have a basic salary + DA amount of Rs 63,820.
For the sake of comparison, let’s assume that this employee doesn’t get any increment at all during the 15 years till retirement. The amount accumulating in this EPF account will be Rs 45,50,213 or Rs 45.50 lakh.
PPF calculator and interest rate
The rate of interest now applicable in the PPF is 7.1%. Let’s assume this rate of interest remains unchanged for the next 15 years. Let a person invest Rs 10,000 a month for 15 years. He/she will be entitled to get a total payment of Rs 32,54,567 or Rs 32.54 lakh at the end of the 15-year period.
The National Pension System, Employees’ Provident Fund and Public Provident Fund are all designed to build a significant corpus for an individual over a long period of time. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
