Investment Strategy

NPS vs Mutual Funds for Retirement: Which is Better?

February 13, 2026

5 min read

By Calc Corpus Team

NPS vs Mutual Funds for Retirement: Which is Better?

National Pension System vs mutual funds - which should you choose?

Quick Comparison

Feature	NPS	Mutual Funds
Returns	9-12%	12-15%
Tax benefit	₹2 lakh	₹1.5 lakh
Flexibility	Low	High
Costs	0.01-0.1%	0.5-2%

The Verdict

For most people: Mutual funds are better due to higher returns and flexibility.

But NPS makes sense for extra ₹50K tax deduction.

Recommended: 80-90% mutual funds, 10-20% NPS.

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Tags

NPS vs mutual fundsNational Pension Systemretirement investments