Comparison of Atal Pension Yojna(APY) with Natonal Pension Yojna (NPS)

If you've still not made your tax investments for this fiscal year, here are two schemes that may offer you additional benefits over and above the limit of Rs. 1,50,000 that is allowed under Section 80C of the Income Tax Act. National Pension System (NPS) and Atal Pension Yojana (APY) are two options for you. Both are government-run pension schemes with different features. While Atal Pension Yojana is focused on the unorganized sector, NPS is for all. Besides, entry age, contribution, returns and tax treatment are different too. Financial planners say one should make a decision based on the features that suit them best as per their personal needs. But to be able to make that decision, one has to learn the basic differences between pension schemes APY and NPS.

	Atal Pension Yojana (APY)	National Pension System (NPS)
Age	The minimum required age to subscribe to both the Atal Pension scheme and NPS is 18 years. However the upper age limit varies.	For NPS, a maximum age of 60 years is acceptable whereas for APY, this age limit is 40 years.
Investment limit:	APY works on pre-defined monthly contributions to earn fixed pension, wherein the earlier one starts the lower is the monthly contribution required to reach the desired pension goal. For example, someone starting as early as 18 years can contribute Rs 210 per month for 42 years to earn a pension of Rs. 5,000.	In NPS, there is no limit on the maximum amount that can be invested.
Minimum investment/contribution	APY comes with three modes of payment of contribution: monthly, quarterly and half-yearly. That means a minimum of two contributions are required every year. An 18-year-old subscriber to APY, for example, is required to pay Rs. 42 per month or Rs. 248 half-yearly for a pension of Rs. 1,000 per month after he or she turns 60.	NPS requires a minimum contribution amount of Rs.500 per contribution and a minimum contribution of Rs. 6,000 per financial year. Subscribers have to make a minimum contribution of one per financial year.
Returns	APY offers pre-defined returns, ranging between Rs. 1,000 and Rs. 5,000 (in multiples of 1,000).	NPS returns are linked to the markets, which means returns can vary depending on multiple factors, including market movement and timing of entry.
Who can subscribe:	Opening an APY account requires the applicant to hold a savings account either with a bank or a post office	. NPS is open to all citizens of India, including NRIs. However, OCI (Overseas Citizens of India) and PIO (Persons of Indian Origin) card holders as well as HUFs (Hindu Undivided Families) are not eligible for opening of NPS account, according to the website of NSDL E-Governance Infrastructure, the central record-keeping agency for NPS.
Flexibility	APY comes with pre-defined contribution schedule based on the applicant's age and returns a fixed pension amount, based on the selected slab.	NPS, being a marked-linked instrument, provides the applicant with an option to adjust allocation to different asset classes as per his or her preference. These asset classes include equity, corporate debt and government securities. However, NPS also offers the "auto choice" option, which is meant for participants not looking to adjust their portfolio on their own.