Refer to the scheme change form for more details. But you don’t have to necessarily do it offline. You can do the same online from your NPS account.
@Hum_Sa Here, I got confused earlier. You are allowed to have different PFMs and investment options under Tier-1 and Tier-2 account. However, you have to stick to one PFM for the chosen investment option. You cannot have one PFM managing your E component while another managing your C or G investments.
Apart from the above, there are some changes in the guidelines for the deposit of NPS contribution by PFRDA:
From 1st Sept 2020 onwards Corporates cannot deposit the NPS contribution themselves and it should be routed through POP only. From 01/09/2020 onwards Rs. 2/- will be deducted from contribution every month as POP Charges.
@Hum_Sa, I found a very good youtube channel specifically for NPS. I have subscribed to it. I remembered we had a discussion about NPS so sharing it with you too.
Hi, I invested in Tier 2 G Scheme of LIC in Jan 2021 and now see that I am making a loss of 14%!!! How does this happen? I was under the impression that LIC G scheme is invested mostly in RBI long term bonds with 7-10% returns. Then why is it showing negative return? Does the NAV fluctuate so much if YES. How to decide when to buy the G Scheme Units?
PS: I understand the below note: NPS Scheme G Returns:
Scheme G of NPS invests in government bonds and related securities. It is a low-risk investment option. Double-digit returns in the past one year has been luring naive investors to invest in such schemes without understanding the rationale. TO understand how NPS delivered superior returns, one needs to know that bond yields and prices of the bonds have an indirect relationship. When yields move down, prices of existing debt schemes go up leading to these securities becoming more favourable due to higher interest rates.
This means that the NAV of the debt scheme goes up when the yields of securities go down and vice versa. This explains the double-digit returns in the Scheme G of NPS in the last one year. As per the data shared, the benchmark 10-year G-Sec yields have gone down from 6.70% to 5.94% which favoured the government scheme portfolio of NPS and so Scheme G of NPS delivered an average return of 12% in the last one year.
One can comment on this only after reviewing the underlying assets and what changed after you invested.
I always recommend keeping a check on the underlying assets of the schemes. http://www.npstrust.org.in/content/scheme-portfolio (updated on monthly basis)
Have a look at the scheme details, maybe you would find your answer.
As a thumb rule, always check the underlying assets before investing, changing scheme, and also keeping in mind other factors like interest risks and credit risks etc.
Looks like you’re new to debt funds. Gilt funds don’t have credit risk, but they carry interest rate risk. Longer the maturity of a bond, higher the interest rate risk. In the last few month yield have risen quite a bit and that means the NAVs fall.
