Comparison with Other Pension Funds
Post Office Senior Citizens Savings Scheme This generally offers slightly better rates than most annuity plans from life insurance companies. However, it has a maximum limit of Rs 15 lakh per person and the income from this scheme is taxable. Post Office Monthly Income Plan This also has attractive rates, but again has a maximum limit of Rs 4.50 lakh per person and the income from this scheme is taxable. Bank or NBFC Deposits These offer monthly payouts, but allow you to invest only for five years at a time. Senior Citizens Savings Scheme The above holds true for this type of scheme too, despite its high return. At the end of five years, if interest rates in the economy fall, your income will fall as well. Debt Mutual Funds Debt mutual funds or monthly income plans may deliver better returns with anytime liquidity, but are linked to market risks. Comparatively, annuity plans are the only long-term option with completely predictable returns. National Pension System (NPS) The maximum entry age to join this scheme is 60 years. It has a prescribed yearly contribution. There are varieties of charges payable (one time and yearly) including fund management, enrollment fee and custodian charges. Forty per cent of the NPS fund on payment has to be invested in annuity fund. However, income tax benefits are attractive. Atal Pension Yojana (Swavalamban Scheme of NPS merged with this scheme) The maximum entry age to join this scheme is 40 years. Contributions are mandatory up to a minimum of 20 years. Monthly contributions go into a corpus fund from which life pension is given on completion of 60 years to the proposer/nominee.