Pension is a fund filled by an individual for a long time. During retirement it can be tapped in to for a regular steady income. The National Pension Scheme is an initiative taken by the Government of India to allow every citizen to gain from a pension account.

It is accumulated over time with a 10% contribution from the individual’s basic salary. It is made mandatory for all government employees, however, the private sector employees can choose between the Employee Provident Fund (EPF) or NPS

1. Risk Appetite –  There is moderate risk involved.
2. Returns – Interest is not guaranteed
3. Taxability – In Tier II accounts have no tax benefits, while Tier I accounts can claim exemptions under Section 80(C) and 80[CCD(1B)]
4. Lock-in period – longest lock-in as it can be withdrawn on after the age of 60 years
5. Withdrawals –  after 3 years withdrawals are allowed for predefined purposes
6. Investment Safety –  Portions are invested in equities which pose a certain amount risk
7. Inflation Cover – The returns are linked to the market (equities) so there is a substantial protection against inflation

Usually, when we place orders online we come across two products, those that don’t charge for delivery and the other that charges for the same. We normally opt or like the ones that are “Delivery Free”. Right?

The simple reason being we do not incur additional charges for our purchase and that reduces the burden of our expenses. Even Direct Plans and Regular Plans of Mutual Funds work on a similar concept.

Regular Plans are mutual funds that you buy through an intermediary such as an advisor, distributor or broker. These agents charge commission, trail or distribution fee for the service they provide, so the total expenditure for your investment is high. And not always do brokers or intermediaries intent to sell plans that suit your financial needs, their primary objective would be to push the scheme and earn their share of profit.

Now let’s look at funds that are like the delivery of free online products.

SEBI made new regulations with regards to Mutual Funds which was made effective on January 1, 2013, 1.e. Introduction of Direct Plans. Direct Plans are those mutual funds in which investors can directly invest with Asset Management Companies (AMC) who do not involve intermediaries and do not charge any agent or broker fees. The advantage of Direct Plans is that the Net Asset Value (NAV – per share market value of a fund) is more when compared to Regular Plans implying that you get to earn more returns on your investments.

Let me help you understand with the help of an example:

A good investment of 2 lakhs in each Direct, as well as Regular plans for 20 years, yield different returns. Direct Plans offer 42.2 lakhs which are 16.5 % returns, whereas Regular plans help you earn 32.7 lakhs which are approximately 15% returns. This is a clear example that Direct plan is more beneficial and hassle-free.

And did you know you can invest in Direct Plan Mutual Funds for zero commission and zero fees? Yes, “MyWay Wealth” app is India’s top trusted app for Direct Plan Mutual Funds, provides you this added advantage. Who should invest in Regular and who should invest in Direct plans?

If you are a newbie in investing and have no prior knowledge of mutual funds, then initially you can opt for Regular plans. However, it’s highly recommended that you quickly switch to Direct plans once you have gathered enough experience and knowledge. Now that you know Direct Plans are better than Regular Plans, Don’t miss on the 1.5% extra returns!

Start Investing Now!

This is an example post, originally published as part of Blogging University. Enroll in one of our ten programs, and start your blog right.

You’re going to publish a post today. Don’t worry about how your blog looks. Don’t worry if you haven’t given it a name yet, or you’re feeling overwhelmed. Just click the “New Post” button, and tell us why you’re here.

Why do this?

• Because it gives new readers context. What are you about? Why should they read your blog?
• Because it will help you focus you own ideas about your blog and what you’d like to do with it.

The post can be short or long, a personal intro to your life or a bloggy mission statement, a manifesto for the future or a simple outline of your the types of things you hope to publish.

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• Why are you blogging publicly, rather than keeping a personal journal?
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• If you blog successfully throughout the next year, what would you hope to have accomplished?

You’re not locked into any of this; one of the wonderful things about blogs is how they constantly evolve as we learn, grow, and interact with one another — but it’s good to know where and why you started, and articulating your goals may just give you a few other post ideas.

Can’t think how to get started? Just write the first thing that pops into your head. Anne Lamott, author of a book on writing we love, says that you need to give yourself permission to write a “crappy first draft”. Anne makes a great point — just start writing, and worry about editing it later.

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