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Investment in NPS & MFs

Increment in NPS won't see matching government contribution

I am a Central government employee. I wanted to subscribe to the New Pension Scheme (NPS). Also, is this the right time to invest in mutual funds?

If you want to take an increment plan, then it is only possible in your existing plan. The account that has been opened by the employer for you, though it might not be governed independently as of now, then you can raise your investment in that particular plan. In the plan, the government would match the contribution made by you. If you want to raise your discretionary investment, then the raised investment would not be matched by the government. For example if Rs 3,000 gets cut from your salary, then the government adds another Rs 3,000 and Rs 6,000 is your investment every month. But if you raise your contribution to Rs 5,000, then also your employer’s addition would be Rs 3,000 and that is how you can increase your investment in the existing plan.

Talking about the mutual fund industry, there are a lot of them available. Broadly, people feel that funds are all about equity only. However, there some funds where only a few days’ investment is required, while there are others that need investment to be carried for months -- equity funds are for a longer period. If you want to invest for many years and will be doing so for the first time, then you should start off with a balanced fund. As for any specific time for investment in the markets, I think one should start small, not invest at one go and invest slowly. If you invest in this systematic manner, then I don’t think mutual funds would ever disappoint you.

I have subscribed to Reliance Diversified Power Fund and Reliance Equity Advantage Fund. They form 10 per cent of my portfolio.

If the diversified power fund is the smaller part of your portfolio then let it be. Reliance Equity Advantage Fund is an average fund and a relatively new fund. But it should be given some time.

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