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NPS: SIP or Lumpsum Investment

Personal Finance & Money Asked by Rajat Sanyal on May 11, 2021

I am an Indian citizen and my age is around 30. I am planning to invest in NPS tier-1 account to get the tax benefits under section 80CCD and for the retirement plan. I want to invest Rs. 50k per (financial) year with 75% allocation in the equity scheme. Now, I have the following doubt:

Should I do a monthly SIP or lumpsum investment for NPS?

My understooding is as follows:

  1. SIP somewhat nullifies the effect of the equity market fluctuations.
  2. Convince fee: If I do SIP I have to pay 12x30x20= 7200 Rs, whereas I have to pay only 600 Rs for lumpsum.

Any experienced opinion on this?

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