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NPS Interest Rate 2026: Latest Returns
NPS interest rates vary depending on market conditions, asset type, the chosen pension fund, and the fund manager's strategy. The 3-year returns of NPS Tier 1 schemes stood at ~6.19% to 11.03%, and the 5-year returns came in at ~5.71% to 10.02%, as of 9 September 2026. Each pension manager's equity returns ranged from negative to slightly positive over the one year.
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- NPS Interest Rate
What Is the Current NPS Interest Rate?
The term 'NPS interest rate' is commonly used to refer to the returns earned on National Pension Scheme (NPS) investments. Unlike a fixed deposit, NPS does not offer a fixed interest rate. Its returns are market-linked and depend on the asset class, pension fund manager, scheme and market conditions.
NPS Returns at a Glance (September 2026)
Historical and current NPS returns vary across asset classes, investment periods and pension fund managers, as shown below:
| Asset Class | 1-Year Return | 3-Year Return | 5-Year Return | Risk Level |
| Equity (Class E) | −7.36% to 1.11% | 7.69% to 11.03% | 8.24% to 10.02% | High |
| Corporate Bonds (Class C) | 5.21% to 6.17% | 7.42% to 7.90% | 6.38% to 6.83% | Moderate |
| Government Securities (Class G) | 3.42% to 4.16% | 6.19% to 6.88% | 5.71% to 6.20% | Low |
| All Tier I Schemes | −7.36% to 6.17% | 6.19% to 11.03% | 5.71% to 10.02% | — |
*NPS Returns as on 9 September 2026. NPS returns are market-linked; past performance does not guarantee future returns.
NPS Interest Rate by Asset Class
The asset allocation chosen under NPS plays an important role in determining the potential returns of your investment. NPS offers four asset classes, each with different risk and return profiles:
| Asset Class | Description | Risk Level | Ideal For |
| Equity (E) | Invests in the stocks of companies | High risk, high return potential | Younger investors seeking long-term growth |
| Corporate Bonds (C) | Invests in bonds issued by companies | Moderate risk | Investors looking for a balance between risk and returns |
| Government Bonds (G) | Invests in government securities | Low risk, stable returns | Conservative investors prioritising safety |
| Alternative Investment (A) | Invests in eligible alternative investment instruments and asset-backed, trust-structured, and other permitted investments, subject to applicable NPS limits | Limited, diversified risk | Investors seeking portfolio diversification |
NPS Tier 1 Interest Rate by Pension Fund Manager
The table below shows the returns generated by NPS Tier I equity pension fund managers.
| Pension Fund Manager | 1-Year Returns | 3-Year Returns | 5-Year Returns |
| Axis Pension Fund | −2.94% | 7.96% | — |
| Aditya Birla Sun Life Pension Fund | 0.91% | 9.20% | 9.17% |
| DSP Pension Fund | −7.36% | — | — |
| HDFC Pension Fund | −1.26% | 9.28% | 8.95% |
| ICICI Life Pension Fund | 1.11% (best 1-yr) | 10.39% | 10.02% (best 5-yr) |
| Kotak Mahindra Pension Fund | −2.54% | 9.44% | 9.67% |
| LIC Pension Fund | −2.86% | 8.19% | 8.72% |
| SBI Pension Fund | −0.43% | 7.69% | 8.24% |
| Tata Pension Fund | 0.38% | 11.03% (best 3-yr) | — |
| UTI Retirement Solutions | −2.75% | 9.96% | 9.42% |
| Benchmark | −0.70% | 9.61% | 9.44% |
*NPS Tier 1 account returns as on 9 September 2026. "—" indicates the fund has not completed this period.
NPS Tier 2 Interest Rate
The NPS rate of interest depends on the pension fund chosen. Here are the NPS returns for the NPS Tier 2 account.
| Pension Fund Manager | 1-Year Returns |
| LIC Pension Fund | 3.38% |
| SBI Pension Fund | 5.27% |
| UTI Pension Fund | 4.37% |
| Benchmark | 3.32% |
*NPS Tier 2 account returns as on 9 September, 2026
NPS Interest Rate by Bank and Provider
The bank, post office, or employer through which you open an NPS account does not set your National Pension Scheme interest rate. These are Points of Presence (PoPs), which serve as registration and servicing channels. Your actual return comes from the pension fund manager you select and the asset mix you choose, both of which can be changed later regardless of where you originally registered.
| Provider | Role in NPS | Set your return? | What actually decides your return |
| State Bank of India (SBI) | Point of Presence | No | The pension fund you pick, which may be SBI Pension Fund or any other |
| India Post/post offices | Point of Presence | No | Same, your chosen pension fund manager and asset mix |
| Canara Bank | Point of Presence | No | Same |
| HDFC Bank | Point of Presence | No | Same |
| ICICI Bank | Point of Presence | No | Same |
| Axis Bank | Point of Presence | No | Same |
NPS Interest Rate Calculator
The NPS Interest Rate Calculator is a simple tool that shows you how your National Pension Scheme contributions will grow over time. Enter your current age, monthly contribution, investment period, and expected rate of return, and it instantly calculates your projected retirement corpus along with the monthly pension you can expect once you exit the scheme. This gives you a clear number to plan around instead of a rough guess.
How is NPS Interest Calculated?
NPS returns are not guaranteed. They are subject to the performance of the underlying assets in your portfolio i.e. equity, corporate debt and government securities. These returns are market linked and hence move up and down with the broader market over the life of the scheme.
Suppose a 30-year-old who invests ₹5,000 every month for 30 years. Over that period, the total contribution comes out to ₹18 lakh. If the investment earns an average annual return of 10%, that corpus could grow to roughly ₹1.13 crore by the time this person turns 60. At a more modest 8% return, the same monthly contribution would build up to around ₹74.5 lakh instead.
It's worth keeping in mind that these figures are only illustrations based on assumed rates, not returns the scheme guarantees.
Factors Affecting NPS Interest Rate
There are a number of factors that affect NPS returns, since the system invests in market-linked assets. The main determinants of returns on NPS are:
- Market Performance: This is the performance of equity markets, corporate bonds and Government securities at a given time.
- Asset Allocation: The risk and return that your NPS portfolio can generate will be dependent on the ratio of Equity (Class E), Corporate Debt (Class C) and Government Securities (Class G).
- Fund Manager Performance: NPS returns may differ depending on the performance of the pension fund manager and the scheme opted for.
- Change in Interest Rates: Changes in interest rates can impact bond returns and, therefore the debt portion of an NPS portfolio.
- Economic Conditions: Inflation, GDP growth and global market trends also affect NPS performance.
- Investment Tenure: A longer investment tenure gives the benefit of compounding.
Tax Benefits on NPS
The Income Tax Act, 2025 offers tax benefits on qualifying NPS contributions and employer contributions, subject to conditions and limits as applicable. Here are the most notable tax benefits of investing in NPS:
| Tax Benefit | Applicable Provision | Taxation Details |
| Deduction for Own NPS Contributions | Section 123 read with Schedule XV (old Sec 80C) |
Eligible own NPS contributions are covered within the ₹1.5 lakh deduction framework, available only in the Old Tax Regime. The applicable limit is generally 10% of salary for salaried individuals and 20% of gross total income for eligible non-salaried individuals. |
| Additional NPS Deduction | Section 124(3)
(old 80CCD(1B)) |
Subscribers can claim a further deduction of up to ₹50,000 for eligible contributions. Available under the Old Regime and Tier 1 accounts only . |
| Tax Benefit on Employer Contribution | Section 124(2) (old 80CCD (2)) |
Employer contributions to an employee's NPS account are eligible for deduction, up to 14% of the employee's salary. |
| Lump Sum Withdrawal at Maturity | Applicable income tax provisions | Under the Corporate taxation model, up to 60% lum sum withdrawal at the age of 60 is tax-free. Annuity income is subject to tax according to the provisions of income-tax applicable to the year. |
NPS vs PPF vs EPF vs FD: Returns Compared
NPS, PPF, EPF and fixed deposits differ in return structure, risk and liquidity. The table below compares them:
| Feature | NPS | PPF | EPF | Fixed Deposit |
| Return Type | Market-linked | Fixed return | Fixed return | Fixed return |
| Historical Return Range | 6.2% to 11% p.a. over 3 years, depending on asset class | 7.1% p.a., subject to periodic revision | 8.25% p.a. for FY 2025-26 | 2.50% p.a. to 8.25% p.a. |
| Risk | Depends on market performance and asset allocation | Low; government-backed | Relatively low; rate declared annually | Low; deposit insurance up to applicable limit |
| Liquidity | Partial withdrawals are allowed, subject to NPS rules | Partial withdrawals from the 7th financial year | Withdrawals and advances are subject to EPFO rules | Premature withdrawal allowed with a penalty |
| Suitability | Long-term retirement planning with market-linked growth | Conservative, long-term savings | Salaried employees covered under EPF | Short to medium-term goals with capital protection |
FAQs
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What is a good NPS interest rate?
NPS does not offer a fixed interest rate because its returns are market-linked. Over the last three years, NPS Tier I schemes have returned roughly 6.2% to 11% a year depending on asset class. A good return depends on your asset allocation, pension fund manager and investment period. Past performance does not guarantee future returns. -
What is today's NPS interest rate?
As on 25 October 2026, NPS Tier I returns over three years ranged from about 6.19% for government securities to 11.03% for the best-performing equity scheme. NPS has no fixed daily rate. The value of your holding changes with the NAV of the schemes you are invested in. -
What is the NPS interest rate in SBI?
SBI does not set an NPS interest rate. SBI acts as a Point of Presence where you open the account, while your returns come from the pension fund you select which may be SBI Pension Fund or any other manager. SBI Pension Fund's Tier 1 equity scheme returned −0.43% over one year and 7.69% over three years as on 9 September 2026. -
What is the post office NPS interest rate?
Post offices act as Points of Presence for NPS and do not set an interest rate. Your return depends on the pension fund manager and asset mix you choose, not on where you registered. NPS Tier 1 returns across asset classes ranged from about 6.2% to 11% a year over the last three years. -
What is the NPS interest rate for NRIs?
NRIs earn the same market-linked NPS returns as resident subscribers; there is no separate NRI interest rate. NRIs can open a Tier 1 account and choose from the same pension fund managers and asset classes, so returns depend entirely on the fund and allocation selected, not on residency status. -
What is the corporate NPS interest rate?
Corporate NPS subscribers can invest through the applicable NPS pension funds and schemes. Returns are market-linked and depend on the selected pension fund, scheme, asset allocation and market performance. What differs is the contribution structure, which may include employer contributions. -
What is the NPS Vatsalya rate of interest?
NPS Vatsalya, an NPS variant meant for minors, does not come with a fixed interest rate. Its returns are linked to the market and are based on the pension fund, investment strategy and asset allocation selected under the NPS Vatsalya framework. -
Is there an NPS interest rate chart?
Yes. The tables on this page function as an NPS interest rate chart, showing 1-year, 3-year and 5-year returns by asset class, by tier and by individual pension fund manager. Because NPS returns are market-linked, any such chart reflects past performance rather than a promised rate. -
Is NPS good in 2026?
NPS can be a suitable option for long-term retirement planning in 2026. It offers market-linked returns and allows investors to choose their asset allocation based on their risk profile and retirement goals. However, the suitability of NPS depends on individual financial needs and investment objectives. -
How can I get ₹10,000 pension per month in NPS?
You need to build up a sufficient retirement corpus and take the portion needed to buy an annuity at exit to get a monthly pension of ₹ 10,000. The amount you need to invest depends on your age, investment period, contribution amount, expected returns and applicable annuity rate. -
How to get ₹50,000 pension per month in NPS?
It’s not just about putting a certain amount every month that will yield you ₹50,000 monthly pension by NPS. It’s more about creating a big enough retirement fund and withdrawing a certain proportion of it for buying an annuity when you leave the scheme. How much fund is needed depends on contributions, duration of investments, gains, annuity rates, and plans. -
Is NPS better than FD?
Both NPS and FD serve different investment objectives. NPS is a market linked pension savings scheme. FD however is an investment product with fixed returns and lower risk. Which option is best for you totally depends on your financial goal and risk tolerance. -
What is the Canara Bank NPS interest rate?
The Canara Bank NPS interest rate is not fixed, as NPS returns are market-linked. The returns depend on the selected scheme, asset allocation and pension fund manager. Canara Bank facilitates NPS services, but the NPS return is not a bank-set interest rate. -
What is the disadvantage of NPS?
NPS has limited liquidity before retirement, although partial withdrawals are permitted subject to applicable conditions. At exit, the portion required to be used for annuity depends on the applicable NPS sector and exit rules. Equity returns can also be negative over short periods, as the one-year figures on this page show.
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