Can a govt employee invest in GPF and NPS simultaneously?

General Provident Fund (GPF) and National Pension System (NPS) are both savings and investment schemes for retirement. Both have different rules. Both have different features. The biggest difference between the two is that NPS is a market linked scheme.

This means that in this scheme, a part of the subscriber’s contribution is invested in shares. Therefore, the return of this scheme depends on the performance of the shares. Let us know about both the schemes in detail.

Major change in retirement scheme in 2004

The central government made a big change in the retirement scheme of its employees in 2004. Actually, NPS was implemented for government employees from January 1, 2004. This means that people who started working in the central government on or after January 1, 2004 come under NPS. People who started working in the central government on or after December 31, 2003 came under GPF. The option of GPF ended for people who started working in the central government on or after January 1, 2004.

Investment options based on your risk taking ability

Investment options are available in NPS according to the investors’ risk-taking capacity. Investors who can take more risk can select Active Choice Fund. In this, the investor can allocate 75 percent in equity i.e. shares till the age of 50 years. After that the allocation in shares decreases to 50 percent. In the Auto Choice option, more allocation in shares is allowed till the age of 35 years. After that it starts decreasing.

Is it allowed to invest in NPS and GPF simultaneously?

There was no option of investing in GPF like in NPS. If an employee has started a government job before January 1, 2004, then he will come under the purview of GPF. In such a situation, if he wants, he can invest in NPS himself. For this, he will have to make the contribution to the scheme himself. The government will not contribute to his NPS account. If any person who started a central government job on or after January 1, 2004 wants to invest in GPF along with NPS, then he will not be allowed to do so. This means that only those who started the job before January 1, 2004 have the option to invest in GPS and NPS simultaneously.

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