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How to Download an NPS Transaction Statement?

The National Pension System (NPS) is a government-backed plan that helps you save for retirement. It works on the principle of making small contributions regularly. Over time, these small amounts compound, which helps your money grow. And, like all investments, it is important to keep track of your NPS contributions.

You can easily track them and stay on top of your retirement savings by accessing your NPS transaction statement. Read on to know how.

Understanding Your NPS Transaction Statement

The NPS transaction statement is like your personal financial diary, it captures every deposit, withdrawal, and investment move in your NPS account. This detailed document shows your contributions and fund allocations. It even serves as proof when you need to claim tax benefits. It basically provides a complete snapshot of your NPS portfolio.

There are 3 main types of NPS account statements:

Transaction Statements: Record all deposits, redemptions and transfers
Holding Statements: Give you an overview of your current investments
Voluntary Contribution Statements: Highlights any extra contributions you make to boost your retirement fund.

This gives you a clear idea of how your investments are performing. It shows how your funds are split among different Pension Fund Managers (PFMs). You can easily figure out which contributions come from you and which come from your employer.

Benefits of Downloading Your NPS Transaction Statement

Downloading your NPS transaction statement online can make managing your finances a breeze. Here are some of the benefits:

Comprehensive Overview: You get all your personal details, contact information, nominee data, and even nodal office information all in one document. The nodal office is the point of contact between NPS subscribers and the Central Recordkeeping Agency (CRA).
Detailed Investment Insights: See real-time data on your total contributions, accumulated pension wealth and returns.
Fund Allocation Clarity: Know exactly how your investments are spread across different PFMs, which helps you make smarter portfolio decisions.
Granular Transaction Breakdown: Track individual contributions, units, and respective returns to fine-tune your investment strategy.
Clear Distinction Between Contributions: Easily tell the difference between what you contribute and what your employer adds.
Proof for Tax Benefits: Use your statement as official documentation to claim applicable tax deductions.

Also Read: Tax Benefits of NPS

Step-by-Step Guide to Downloading Your NPS Transaction Statement

Here’s how you can access your NPS statement online and keep your records updated:

Visit the NSDL (National Securities Depository Limited) Website
Open your web browser and head over to www.cra-nsdl.com.
Log in Using Your PRAN
Use your Permanent Retirement Account Number (PRAN) as your user ID along with your password to sign in. This will give you access to your NPS records.
Complete the Captcha
Before proceeding, you’ll need to enter the captcha code to verify that you’re not a robot. Once you enter the code correctly, hit the ‘Proceed’ button.
Access Your Statement Section
Once you’re in, navigate to the ‘Transaction Statement’ section. Here, click on ‘Holding Statement’ to quickly view your account balance.
Download the Full Statement
Select the ‘Transaction Statement’ option and click on ‘Download.’ Your NPS statement PDF download will start soon!

The NSDL portal is secure and easy to use, keeping you updated on your contributions and investments anytime, anywhere.

After you’re done downloading your statement, you’ll need a password for NPS statement access. Here’s how the password is structured:

It is an 8-character code.
The first 4 characters are the starting letters of your first name (if your first name is shorter than four characters, a ‘9’ is added to complete the sequence).
The last 4 digits represent your date and month of birth in DDMM format.

If you ever face any issues or forget your password for the NPS statement, you can click on the ‘Forgot Password?’ link on your login page and follow the instructions to reset your password.

Follow these steps to download NPS statement and keep a detailed record of your retirement savings. Managing your National Pension System transactions is as simple as that! So whether you’re preparing for tax submissions, tracking your investment growth, or simply keeping your financial life organised, having your NPS statement at your fingertips can be helpful.

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FAQs:

Can I download statements for a specific time period?

Yes, most NPS portals like the NSDL allow you to select a custom date range. You can focus on specific months, quarters, or financial years without having to sift through your entire transaction history.

What if I forget my NPS account password?

Don’t worry! If you forget your password, click on the ‘Forgot Password?’ tab on the NSDL or your bank’s portal. This easy-to-follow process will help you reset your login credentials quickly and securely.

Can I download transaction statements for Corporate NPS accounts?

Absolutely. Whether you’re managing a personal or corporate account, the process remains largely the same. Corporate users can also download NPS statement records to keep detailed track of all contributions and investments made by the company.

National Pension Scheme Returns and Taxes Implications: An Easy Guide

Financial planning is important for your future, especially during retirement. Investing in various schemes and assets helps lower risks and get higher returns in your golden years. To access financial stability during retirement, the Government of India launched the National Pension Scheme (NPS). This scheme is open to all working-class employees except those in the armed forces. National Pension Scheme returns are completely tax-free until maturity.

This scheme allows you to invest in a pension account until you are employed. After retirement, you receive the amount in the form of a monthly pension. It is focused on long-term retirement income and one benefit of it is the tax exemption you enjoy. The returns on the NPS scheme depend on your asset allocation, which can be equity, alternative assets, corporate bonds or government bonds.

National Pension Scheme Benefits

Investing in the National Pension Scheme (NPS) allows you to benefit from tax exemptions and access higher returns. The NPS program comes with simple exit rules, too. Read on to understand these and other benefits in detail:

You can claim a tax deduction for contributions made. Under Section 80CCE of the Income Tax Act, you can claim a tax benefit of up to ₹1.5 Lakhs. An additional deduction of ₹50,000 under Section 80CCD(B) can be claimed.
Compared to long-term savings schemes like the Public Provident Fund, the returns from NPS are higher. As a portion of the fund goes to equity, NPS provides excellent returns among other options. You can change the fund manager if you wish to invest in a different portfolio. You can calculate NPS returns using a free online calculator. Also, the risk associated is lower as the equity exposure is capped at up to 75% for all return rates.
The exit options and terms for the NPS program are flexible. When you reach the age of 60 years, you can withdraw a lump sum of 60% of the corpus amount. You can also make withdrawals thrice with a minimum gap of 5 years during the investment period. You can use these withdrawn funds for medical emergencies, children’s education or to buy a house.

Types of NPS Accounts

There are two types of NPS accounts, where a Tier 1 account is the main one and a Tier 2 account is optional.

Tier-1 Account

This is the main account where you can invest as a salaried or self-employed individual. As this is the main account, you cannot make withdrawals before attaining 60 years of age. You can contribute to assets like government securities, equity and corporate bonds.

Tier-2 Account

This is an optional account that you can contribute to only if you have a Tier-1 account. This account investment is similar to a mutual fund with no lock-in period. You can withdraw funds whenever required and get tax benefits only if you are a government employee.

NPS Returns for Different Accounts

The returns in the NPS program are excellent based on the investment and account type. You must note that the long-term returns from both accounts vary depending on market fluctuations.

NPS Tier-1 Returns

The tier-1 account invests in a mix of asset classes and provides assured returns. The NPS return percentage can range from 9% to 12% based on how well the investments perform. For the first year, the NPS return percentage is up to 9.40% on government bonds, 8.55% on alternative assets, 32.96% on equity and 7.91% on corporate bonds on average. The minimum contribution to this account starts from ₹500.

NPS Tier-2 Returns

Depending on our investment selections, Tier-2 provides returns that may differ from Tier-1 account returns. The potential returns can also vary as this account enables withdrawal options without limitations. Similar to Tier-1 accounts, the returns will depend on how well the asset classes perform. For the first year, the NPS tier-2 returns offer 7.84% on corporate bonds, 32.98% on equity and 9.24% on government bonds on average. The minimum contribution to this account starts from ₹1,000.

Tax on NPS Returns

NPS Tier-1 returns and Tier-2 returns are completely tax-free until maturity. As soon as you turn 60 years, you can withdraw up to 60% of the lump-sum amount, tax-exempt under Section 10(12A). The remaining 40% you can use to buy annuities, which are again tax-free under Section 8CCD(5).

Also Read: Tax Benefits of NPS

National Pension Scheme Withdrawal or Exit Rules

The exit rules for the NPS program are simple, as you can withdraw upon reaching 60 years, prematurely or upon death.

When you attain 60 years, you can use at least 40% annuity to get a regular monthly income and withdraw the remaining 60%. However, you can withdraw 100% of the corpus amount if your amount is equal to or less than ₹5 Lakhs.
In case of premature exit, you can use at least 80% of the corpus amount to buy an annuity providing a regular monthly pension. If your amount is less than or equal to ₹2.5 Lakhs, you can opt for a 100% lump-sum withdrawal facility.
If you die as a contributor, 100% corpus amount is provided to your heir or the nominee.

Investing early on in NPS can help you build retirement savings with better returns across various asset classes. You can choose between Tier 1 and Tier 2 accounts, but keep in mind that returns depend on market performance and fund management.

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FAQs on National Pension Scheme Returns

Does the NPS provide inflation-adjusted returns?

Yes. The NPS provides a higher inflation-adjusted return of 9% up to 12% over the long term, compared to other schemes such as PPF and SCSS.

Can I adjust my NPS contributions to increase potential returns?

Yes, you can adjust your NPS contributions and the asset allocation within the NPS scheme to optimise potential returns based on your risk tolerance. You can invest in a mix of equity, corporate bonds and government securities, which can help you tailor your portfolio according to your retirement goals. Additionally, you can change your pension fund manager if needed.

Can I expect NPS returns to beat inflation in the long run?

Yes. You can expect the NPS returns to beat inflation in the long run, as experts determine a mix of debt and equity chosen ahead of other options can tackle up to 7% inflation growth easily.

Is NPS better than FD?

NPS programs can offer much higher returns compared to Fixed Deposits (FDs) as they invest in different market-linked equities. However, these returns fluctuate based on market conditions and may not remain stable.

Calculation Of The Working Capital: Easy Steps & Formulas

Working capital is a financial metric helping businesses measure their short-term financial health. The calculation of the working capital starts by subtracting current liabilities from assets and then dividing net sales by the working capital.

The working capital turnover ratio shows how efficiently a company uses its funds to keep the business running. It helps to understand if the company can manage its financial needs smoothly.

This ratio is important for investors and business managers as it helps them see if the company can grow and stay profitable with its available resources.

Understanding the Working Capital Turnover Ratio

The working capital turnover ratio meaning is important to know, especially when you run a business. It measures how efficiently a company uses its funds to generate revenue. The calculation of the working capital turnover ratio is done with simple formulas:

🔹 Working Capital = Current Assets – Current Liabilities
🔹Working Capital Turnover Ratio = Net Sales / Working Capital

However, the formula for working capital ratio can be adjusted depending on the current values. A low ratio indicates poor financial management, lower liquidity, and potential risk of bankruptcy. A high ratio (ideally between 1.5 to 2) means the company efficiently uses its funds to manage operations and growth. However, a ratio above 3 suggests underutilised capital, which may cause future financial challenges.

By analysing this ratio, businesses and investors can assess a company’s ability to maintain smooth operations and long-term profitability.

Example of Working Capital Turnover Calculation

Let us assume that a company XYZ values its current assets as ₹6 lakhs, current liabilities as ₹3 lakhs and net sales as ₹5 lakhs. Using the working capital method:

Working Capital Formula = Current Assets – Current Liabilities

= ₹6,00,000 – ₹3,00,000

= ₹3,00,000

To know how to calculate working capital turnover ratio, we must divide the working capital by the net sales of ₹5 lakhs.

Working Capital Turnover = Working Capital / Net Sales

= ₹5,00,000/₹3,00,000

=1.67

The working capital turnover ratio for XYZ company is 1.67, which is excellent.

Advantages of Working Capital Turnover Ratio

By calculating this ratio, a company can understand its financial status and compare it against the market. Some other advantages include:

Helps a company assess how efficiently it uses funds for sales and operations
Enables comparison of past and current performance to identify trends
Improves decision-making on working capital, inventory and payments
Evaluates daily operations to track growth and financial stability

Also Read: Working Capital Cycle

Limitations of Working Capital Turnover Ratio

Other than the benefits of this calculation, you can come across some limitations as well. This can include overlooking important details and temporary fluctuations.

One limitation of this ratio calculation is that it provides a very narrow insight into the company. It does not focus on the profitability of the business model.
This ratio calculation varies across different industries and regions. Sometimes, this calculation can be misleading for companies due to the sector in which they operate.
Solely focusing on this ratio and ignoring other important data can lead to mistaken conclusions for the company. Since a company’s financials can fluctuate over time, the ratio may change, which makes it less reliable in the short term.

Since the working capital turnover ratio shows how well a company uses its funds, a lower ratio could mean overspending or poor financial management. To keep it on track, you need to manage your funds wisely.

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FAQs on Working Capital Turnover Ratio

What is a good working capital ratio?

A good working capital turnover ratio can range between 1.5 and 2. A ratio less than 1 depicts liquidity issues, whereas a ratio above 3 indicates the company is not using the funds efficiently.

What is the net working capital ratio?

It is a financial metric used by companies to assess their current financial standing. They use the formula: Current assets – Current liabilities and then Working Capital / Net Sales to arrive at a ratio.

Is a high NWC good?

No. A higher net working capital of more than 3 indicates that a company is not using the funds efficiently for future growth. The ideal ratio should remain between 1.5 and 2.

What is the formula for the net working capital ratio?

The formula for the net working capital ratio is Current Assets / Current Liabilities.

How to Close Your FASTag Account and Retrieve Your Refund?

FASTag makes highway toll payments quick and cashless, just like an online wallet—you recharge and use it as needed.

If you need to deactivate your FASTag, it could be due to reasons like a lost tag, vehicle sale, or scrapping. You can close it online or offline via phone or email. Some issuers also offer a refund for the remaining balance by submitting a form or documents.

Reasons to Deactivate FASTag

You may need to deactivate FASTag if you are about to sell your vehicle or if it is not worth repairing and old. This is necessary as a single FASTag applies to a specific vehicle.

You may be looking to deactivate the FASTag if you are selling or transferring your vehicle to another buyer. It will help a new buyer put up their own FASTag and avoid the new user taking advantage of your personal and account details.
If your FASTag is lost or damaged, you must add a new one while deactivating the current one. To avoid toll penalties and unauthorised use, deactivation is necessary if the FASTag is stolen.
To avoid unwanted complexities in future, you have to deactivate the FASTag if your vehicle is going into scrap for being too old. If the deactivation is not followed, you may have to face toll penalties.

Steps to Deactivate FASTag Offline

You can deactivate your current FASTag by calling the toll-free number or emailing the portal. The steps to follow for these methods are listed below.

Reach out to customer service of FASTag. You can call phone support on the toll-free number for your respective issuer or reach out through the FASTag helpline number 1033. You can also write an email to the team at fastagsupport@1pay.in
Provide all the necessary details related such as FASTag account number, registered mobile number, vehicle registration number, vehicle model and class.
As per the communication, list your reason for deactivating FASTag. You can mention any reasons listed above.
The executive will process our deactivation request. Soon you will receive a confirmation message after your account is deactivated.

Steps to Deactivate FASTag Online

If you wish to complete the process for deactivation online, you can navigate to the online portal and complete the steps. If you are wondering how to close a FASTag account online, here are the steps.

Navigate to the official website of your FASTag issuer
Log in to your account using your credentials
Check out for the ‘service request’ or ‘close account’ option
Add some required information related to FASTag, vehicle and your personal information

Submit your request and wait for the confirmation message

Importance of Deactivating FASTag Before Selling Your Vehicle

It is essential to deactivate the FASTag account before selling or scrapping your vehicle as per the regulations. This will avoid misuse of your personal and account information and allow a smooth transition between you and the buyer.

If you are selling your vehicle to another user, deactivation will avoid unauthorised usage of your personal and account details. Failing to deactivate your FASTag may result in unexpected toll charges on your account.
Deactivating while selling your FASTag makes sure that the new owner of the vehicle can associate their own FASTag.
You may be liable for toll penalties and law violations if the new vehicle owner does not make toll payments. You as the registered FASTag and vehicle owner will have to face non-compliance and violation issues.

Refund Procedure

After you deactivate your FASTag account, if there is some remaining balance, you can get it as a refund. To expect a refund after deactivation of your FASTag account, you can follow these steps:

Check your account balance before you opt to close your account. Through this, you will know how much refund you will get after a successful account closing.
While communicating with the FASTag team, follow the instructions to get a refund. You may also need to submit some documents for the same, depending on your FASTag issuer.
Depending on the FASTag issuer, the terms and policies for a refund might differ. At a maximum, it might take around 15 working days to process your refund and receive it in your account.

You must deactivate FASTag before selling your vehicle as it is a smart move to avoid any disputes down the road. It keeps your financial and personal information safe and ensures you get back any remaining balance as a refund.

It also helps you stay compliant with regulations and prevents unwanted issues far ahead. By following the deactivation and refund steps properly, you will have a smooth deactivation process. However, keep in mind that the exact steps might vary depending on your FASTag issuer, so it is always a good idea to check their specific guidelines and terms.

FAQs on Deactivating FASTag Account

Is it possible to temporarily deactivate the FASTag account?

Yes. It is possible to temporarily deactivate the FASTag account. To do so, visit the online issuer portal or call the toll-free number to raise a request for the same.

What are the consequences of selling the car with an active FASTag account?

If you sell the car to another owner with an active FASTag account, you may face unexpected toll charges in your account. This can also result in law violations and enable unauthorised information misuse.

Is it possible to deactivate the FASTag account online?

Yes. You can deactivate the FASTag account online by visiting your FASTag issuer’s official website. Log in using your credentials and search for service request or account closure. Provide the required information and documents to confirm your request.

What happens if I close my FASTag account?

After closing your FASTag account, you will be eligible for a refund in case of remaining balance in your account. Before closing the account, check for the remaining balance to get it back as a refund.

Company Credit Report: A Guide to its Meaning and Value

In a business environment, finance management is necessary to ensure creditworthiness and economic stability. Just like a credit report assesses personal financial health, a Company Credit Report (CCR) helps businesses evaluate their financial position. This report determines your company’s creditworthiness and eligibility for new credit.

Compiled by credit institutions like CIBIL, this document uses data from banks and NBFCs that your company has accounts with or has taken credit from. The CCR provides a comprehensive financial assessment, which you can refer to as a CIBIL report for a company. It serves as a crucial tool for loan sanctioning and helps a business maintain financial health.

About Company Credit Report

A company credit report is similar to a general credit report, which describes the financial health of a business or company. This information is retrieved from credit institutions like CIBIL and estimates if your business is creditworthy and eligible for loans.

This report is necessary for MSME loan approval and a bank or NBFC may check it before giving you a green flag on the loan application. This document details your company’s background, the CIBIL rank between 1 to 10 and finance data. Whether you are a micro, small or medium enterprise, this document will help you get insights into your financial position.

Key Components of a Company Credit Report (CCR)

The CCR is based on some key components credit institutions use to assess your creditworthiness and financial position. These include credit history, ranking and debts. Some key components used are listed here.

Credit Rank

The CIBIL rank ranges from 1 to 10 and is assessed through your company’s financial history. A score closer to 1 determines excellent credit health. However, a CIBIL rank close to 10 is not deemed creditworthy.

Payment History

This includes a brief detail of the company’s history related to repayment, revenue, collections, cash flow, loans, etc. The report takes into consideration timely repayment of credit or defaults and lapses.

Debts

Debts determine the total amount of money you owe in the form of a loans. The total amount you owe to the creditors or financial lenders that is currently due determines if you are eligible for fresh credit or not.

Credit Utilisation

The ratio to the total credit sanctioned compared to the credit you have used is the total utilisation ratio. For instance, if you have used 60% of the amount provided to you as a business loan, the credit utilisation is high. It can impact your creditworthiness for upcoming financial products.

Public Records

If there are any financial or legal issues connected to your firm, your creditworthiness may be affected. It is advisable to resolve legal matters as soon as possible as this may be included into your CCR.

Steps to Check and Download Your Company Credit Report

To get your company’s financial assessment document from institutions like CIBIL, you can opt for an online process. If you are wondering how to check the company CIBIL score, you can log in to the official website or follow the steps below:

Visit the official CIBIL website
Enter your company details such as name, registration details or business credentials
Choose the report you want to download (other than CCR, you can also get GST reports)
Provide the company’s identification documents
To download the complete report, you might have to pay a fee
Complete the payment and download the report

Also Read: Importance of Your CIBIL Score

Factors that Affect Your Company Credit Report

Some factors like a longer credit history and timely repayment mark you as a responsible business. Some of these factors are listed below:

If your repayments are timely, your payment history will look excellent.
If the credit utilisation ratio is high, your company credit report may restrict your eligibility and creditworthiness.
If the bank or NBFC encounters legal issues as public records in your report, your creditworthiness will go down.
If your company’s credit report is lengthy, you will be considered highly eligible (the shorter the credit history length is, the more doubtful the lender will be regarding your borrowing behaviour).
Compared to new firms, older organisations tend to have higher credit scores as a longer business vintage points to greater experience.

Tips for Improving Your Company Credit Report

Some crucial factors such as credit history length and credit rank determine your company’s financial status. To ensure that your report is excellent and you are eligible for new credit, here are some tips to follow:

Timely payments of loans or credit cards is essential
Keep an eye on the company’s credit report to make improvements gradually
Depict a healthy credit mix of business loans, credit cards and trade credit
Manage your debts well using revenue to repay loans while keeping the company profitable
Limit the number of loan applications you make

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FAQs on Company Credit Reports

How can I check my GST Report as a part of my Company Credit Report?

To check your GST Report as a part of my Company Credit Report, you must navigate to the official CIBL website. Fill out the company credentials and choose the report you want to download. Complete the fee payment and get access to the report.

How can I update the Company Credit Report, CIBIL Rank and GST Report?

You cannot update the Company Credit Report, CIBIL Rank and GST Report. However, you can improve it through tips like improving credit utilisation, clearing debts, timely repayment, etc.

Why do companies need credit reports?

Companies and businesses require a credit report to assess and depict themselves as creditworthy. It helps banks and NBFCs provide them with loans and other financial assistance.

What is a company credit report?

A company credit report provides information about a business’s detailed past related to credit dealings and its credit rank. It helps lenders assess the business’s creditworthiness and provide them with affordable credit.

Meaning of Absolute Returns: A Simple Explanation

Investing in mutual funds? Then you’ve probably come across the term absolute returns at some point. But what exactly is absolute returns meaning and how does it impact your investments?

Read on to understand what is absolute return in mutual funds and other important facts.

Understanding Absolute Returns in Mutual Funds

Absolute return refers to the total percentage gain or loss on an investment over a specific period. Unlike relative return, which compares performance to a benchmark, absolute return focuses solely on how much your investment has grown or shrunk.

Check the table below to understand the difference between the two:

Feature	Absolute Return	Relative Return
Measures	Total gains/losses in percentage	Performance compared to a benchmark
Timeframe	Fixed (e.g., 1 year, 3 years)	Continuous comparison
Benchmark Dependence	Not required	Required
Simplicity	Easy to understand	More complex

How is Absolute Return Calculated?

The formula for absolute return is straightforward: [(Current Value / Initial Investment Value) – 1] X 100

Example:

You invest ₹1 lakh in a mutual fund. After 2 years, your investment grows to ₹1.5 lakh. Using the formula, your absolute return is 50%. Here’s a table to show the projections.

Initial Investment	Final Value	Absolute Return
₹1,00,000	₹1,50,000	50%
₹2,00,000	₹2,50,000	25%
₹50,000	₹60,000	20%

Absolute Return vs. CAGR (Compounded Annual Growth Rate)

Absolute returns only tell you the overall gain, while the CAGR considers the time factor.

Feature	Absolute Return	CAGR
Time Consideration	No time factor	Time-based growth
Simplicity	Easy to calculate	More accurate for long-term investments
Suitable for	Short-term view	Long-term investment analysis

Why Should You Care About Absolute Returns?

Understanding absolute returns helps you:

Evaluate the total profit or loss on your investment
Compare different mutual funds on a basic level
Make informed decisions about exiting or reinvesting in funds

However, it does not tell you the annualised return, so if you’re comparing funds over different time periods, CAGR may be more useful.

When is Absolute Return Useful?

Absolute returns in mutual funds work best when:

You’re investing for a short period (less than 3 years)
You want a direct, easy-to-understand number
Comparing two funds launched at the same time

It’s less useful when:

Comparing funds over different timeframes
Assessing long-term wealth creation
Evaluating performance in volatile markets

Absolute Return in Different Market Conditions

These returns change as per the market, be it bearish or bullish. Here’s how.

Market Condition	Absolute Return Impact
Bull Market (Rising)	Higher absolute returns
Bear Market (Falling)	Negative absolute returns
Stable Market	Moderate absolute returns

If the market is booming, absolute returns look great. But if there’s a downturn, absolute returns can be misleading without additional context.

Limitations of Absolute Returns

While absolute returns are easy to calculate, they come with a few drawbacks:

They don’t consider time—A 50% return in 1 year is very different from 50% in 5 years.
No risk assessment—Absolute return doesn’t reflect market volatility.
Can be misleading—A 20% gain in a booming market isn’t as impressive as it sounds.

To get a clearer picture, always compare absolute returns with other metrics like CAGR, risk-adjusted returns and standard deviation.

Absolute Returns in Different Types of Mutual Funds

Different mutual funds yield different absolute returns based on their asset allocation and investment strategy.

Type of Mutual Fund	Expected Absolute Return (Approx.)
Equity Funds	12-15% over 5+ years
Debt Funds	6-9% over 3-5 years
Hybrid Funds	8-12% over 5 years
Liquid Funds	3-5% for short durations

Equity funds generally offer higher absolute returns over the long term but with more risk. Debt funds provide stability, while liquid funds are best for short-term needs.

Also Read: Types of Mutual Funds in India

How to Use Absolute Returns in Your Investment Decisions?

Short-term Investments: Absolute return works well if you’re investing for a short period.
Comparing Funds: If two funds started at the same time, absolute return gives a quick performance snapshot.
Tracking Profits: Helps you see your gains in simple percentage terms.

Absolute return is a simple but powerful tool to measure your investment’s growth. While it’s easy to calculate, always consider other metrics like CAGR and relative returns for a holistic view. If you’re planning long-term investments, don’t just look at absolute returns in mutual funds—think bigger.

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FAQs on Absolute Returns

How is absolute return calculated for a mutual fund?

Absolute return is calculated using the formula:

(Current Value – Initial Investment)/ Initial Investment X 100

It simply measures the percentage gain or loss on your initial investment over a set period.

What’s the difference between absolute return and total return?

Absolute return measures just the price appreciation, while total return includes dividends, interest and distributions received during the investment period.

Does absolute return account for dividends or distributions?

No, absolute return only considers the change in price. If you want a more comprehensive measure, look at total return, which includes dividends and reinvested earnings.

NFO’s Full Form: Understanding New Fund Offers in Detail

If you’re looking to invest in mutual funds, you’ve probably come across the term NFO. But what exactly is NFO’s full form and should you invest in one?

Read on to learn about NFOs in mutual funds and more.

What is NFO in Mutual Funds?

A New Fund Offer (NFO) is when an asset management company launches a new mutual fund scheme. It is similar to an Initial Public Offering (IPO) in the stock market but for mutual funds.

Here’s how they differ:

Aspect	New Fund Offer (NFO)	Initial Public Offering (IPO)
Purpose	Launch a new mutual fund scheme	Raise capital by issuing shares
Price	Fixed or ₹10 per unit (mostly)	Market-driven
Investment Type	Mutual Funds	Equity (Company Shares)
Listing	Not traded on stock exchanges	Listed and traded on stock exchanges

What are the Types of NFOs?

When you explore NFO mutual funds, you’ll find two main types:

Type of NFO	Description
Open-ended NFO	After the NFO period, you can buy or sell fund units anytime
Close-ended NFO	Invest only during the NFO period Redemption is restricted till maturity

How Does an NFO Work?

Listed below is a simple breakdown of the process:

Announcement: The AMC announces the launch of an NFO with a fixed subscription period.
Subscription Period: Investors can subscribe to the fund at a base price (usually ₹10 per unit).
Fund Collection: The AMC collects funds from investors and starts investing as per the fund’s objective.
Portfolio Construction: The fund manager invests in stocks, bonds or other securities.

Post-NFO Trading:

If it’s an open-ended fund, you can invest or exit anytime.
If it’s a close-ended fund, you must hold units until maturity (unless it is listed on the stock exchange).

Why Consider NFO Investment?

Thinking about investing in an NFO? Here are some key NFO benefits:

NFO Benefits	Why it Matters
Lower Entry Price	NFOs usually start at ₹10 per unit, making it affordable
New Investment Strategy	AMCs introduce fresh investment ideas and themes
Potential for Higher Returns	Early investments in unique funds may yield good returns
Diversification	NFOs may offer exposure to new markets, sectors or strategies

Risks of NFOs

While NFOs sound exciting, there are some risks to keep in mind:

Risk Factor	Explanation
No Past Performance	Unlike existing funds, NFOs have no historical data
Fund Manager Risk	Success depends on the fund manager’s strategy and decisions
Liquidity Issues	Close-ended NFOs lock in your money for years
Market Conditions	If the market dips, so does your investment

Who Should Invest in NFOs?

NFOs in mutual funds aren’t for everyone. Here’s a quick check to see if they suit you:

You should invest if:

You are a long-term investor.
You believe in the fund’s theme or strategy.
You are okay with some risk and uncertainty.
You have a diversified portfolio and want to add new funds.

You should avoid if:

You need short-term liquidity.
You prefer funds with a proven track record.
You are risk-averse and want stable returns.

How to Invest in NFOs?

Here’s how you can invest in NFOs with ease:

Steps	What to Do
Step 1	Research different NFOs and their investment objectives.
Step 2	Compare with existing mutual funds.
Step 3	Check the NFO details (fund type, lock-in period, etc.).
Step 4	Choose a trusted investment platform or AMC website.
Step 5	Complete the KYC process if you’re a first-time investor.
Step 6	Invest within the NFO subscription period.
Step 7	Monitor your investment after the fund is launched.

NFO vs. Existing Mutual Funds

Still unsure whether to go for an NFO or a regular mutual fund? Here’s a comparison:

Feature	NFO Mutual Fund	Existing Mutual Fund
Track Record	No past performance	Proven performance history
Price	Fixed price (mostly ₹10)	Market-driven NAV
Investment Strategy	New theme/strategy	Already established
Liquidity	Limited (depends on fund type)	High (for open-ended funds)

NFOs in mutual funds can be a great opportunity if you understand what you’re getting into. If you’re confident about the fund’s strategy and don’t mind some risk, an NFO might be worth considering. But if you prefer a safer route, an existing mutual fund with a track record might be a better fit.

A mutual fund opens up a path for you to invest flexibly and get started even with the smallest amount. In addition, you can also leverage it to access instant funds with Fibe’s Loan Against Mutual Funds. Get up to ₹10 lakhs with easy digital application, minimum documentation and swift approval on Fibe. Download the app and apply now.

FAQs on New Fund Offer

What is the NFO full form?

NFO refers to New Fund Offer. AMCs often launch an NFO with a fixed subscription period.

Is NFO better than SIP?

It depends on your investment style. NFOs provide access to new themes but lack historical performance data. SIPs in existing funds offer consistency and risk averaging. If you prefer stability, SIPs may be better.

How is NAV calculated for NFO?

NAV (Net Asset Value) in an NFO is calculated as:

NAV = (Total Assets – Liabilities) / Total Units Issued

Initially, the NAV is usually ₹10, but it changes based on fund performance.

Can I cancel NFO?

Yes, you can cancel your NFO investment before the subscription period ends. Post-allocation, redemption depends on fund type—open-ended allows exits, while close-ended requires waiting until maturity.

Can I start SIP in NFO?

SIP is not available during the NFO investment period. However, once an open-ended NFO is converted into a regular mutual fund, you can choose a SIP.

What is TER in Mutual Fund? A Simple Explanation for Investors

Investing in mutual funds? Smart choice! But do you know the cost of managing the investment? That’s where the Total Expense Ratio (TER) helps. Understanding what is TER in mutual funds can help you make smarter investment choices. Let’s break it down step by step.

Read on to know the meaning of total expense ratio in mutual funds, how to calculate it and more.

What is the Total Expense Ratio (TER)?

Think of TER as the cost of doing business with your mutual fund. It’s the percentage of your total investment that goes toward managing and operating the fund.

TER Meaning in Mutual Fund:

A management fee for fund managers handling your money.
Administrative expenses like audits, marketing, legal fees, etc.
Operational costs for running the fund smoothly.
It’s deducted from your returns, so a lower TER means higher take-home profits.

The Formula for TER Calculation:

TER = Total Fund Expenses/Total Assets Under Management (AUM) x 100

TER Calculations in Mutual Funds

Different mutual funds have different expense structures. Here’s how TER calculations are applied in various fund types:

Mutual Fund Type	Typical TER Range
Equity Funds	1.5% – 2.5%
Debt Funds	0.5% – 1.5%
Index Funds	0.1% – 1%
ETFs	0.05% – 1%
Hybrid Funds	1% – 2.5%

Example of TER Calculation:

Let’s say you invest ₹1 lakh in an equity mutual fund with a TER of 1.5%. This means ₹1,500 is deducted from your investment value every year, which will be your annual expense.

Why TER is Important?

TER may seem like a small percentage, but over time, it can reduce your returns. Let’s see how:

Investment Amount	TER (%)	5-Year Cost	10-Year Cost
₹1,00,000	2.0%	₹10,000	₹20,000
₹5,00,000	1.5%	₹37,500	₹75,000
₹10,00,000	1.0%	₹50,000	₹1,00,000

The lower the TER, the higher your overall returns. Choosing a fund with a lower TER can make a significant difference over time.

TER in Actively Managed vs. Passive Funds

Actively Managed Funds

Fund managers actively buy and sell stocks.
Higher TER due to management fees.
Best for: Investors looking for higher potential returns and are okay with paying more.

Passive Funds (Index Funds & ETFs)

Just track an index like NIFTY 50.
Lower TER since there’s minimal management effort.
Best for: Cost-conscious investors who prefer long-term wealth creation.

Fund Type	Expense Ratio (%)
Active Funds	1% – 2.5%
Passive Funds	0.1% – 1%

How Does SEBI Regulate TER?

SEBI (Securities and Exchange Board of India) sets TER limits to protect investors. Here’s how:

AUM Size (₹ Crores)	Maximum TER (%)
Up to 500	2.25%
500 – 750	2.00%
750 – 2,000	1.75%
2,000 – 5,000	1.60%
Above 5,000	1.50%

As a fund grows, SEBI mandates lower TERs to pass benefits to investors.

Tips to Choose Mutual Funds with an Optimal TER

Compare funds: Don’t just go with the best past performance — check their TER too.
Check fund size (AUM): Larger funds tend to have lower TERs.
Prefer passive funds for cost-efficiency: If you’re looking for long-term returns with lower costs, ETFs or index funds are good options.
Use online TER comparison tools: Many financial websites offer TER comparison charts.
Balance cost vs. performance: Sometimes, paying a slightly higher TER is worth it if the fund delivers superior returns.

Mutual fund expenses are like hidden costs—they may seem small, but they add up. Understanding TER meaning in mutual funds helps you make more informed decisions. If you want your money to work smarter, always keep an eye on TER before investing.

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FAQs on Total Expense Ratio

Should the total expense ratio be high or low?

A lower TER is better as it reduces costs and boosts returns. However, some actively managed funds justify a higher TER with strong performance.

What is a good expense ratio for a mutual fund?

Equity Funds: Below 1.5% is ideal
Debt Funds: Below 1% is preferable
Index Funds & ETFs: Below 0.5% is excellent

Is the expense ratio fixed?

No, TER fluctuates based on the fund’s AUM and expenses. It can change periodically and is reviewed by SEBI.

PPF Withdrawal Rules Explained: A Simple and Practical Guide

Public Provident Fund (PPF) is one of the most popular long-term savings options in India. It offers tax benefits, steady returns and a 15-year lock-in period. But what happens when you need to withdraw funds before maturity? Here is a clear and simple breakdown of the PPF withdrawal rules.

Read on to learn about the rules, benefits, premature closure policy and more.

Understanding PPF Withdrawal Rules

PPF allows withdrawals in two ways:

Partial Withdrawal: Allowed after a certain number of years for emergencies or specific needs.
Complete Withdrawal: Possible only at maturity, but there are exceptions for premature closure.

PPF Partial Withdrawal Rules

PPF partial withdrawal is permitted only after 6 financial years from the date of account opening. Here’s what you need to know:

Criteria	Details
Eligibility	Allowed from the 7th financial year
Amount Limit	Up to 50% of the balance at the end of the 4th year or preceding year, whichever is lower
Number of Withdrawals	Once per financial year
Approval Process	Submit Form C to the bank/post office

Example:

Let’s say your PPF account has the following details:

Balance at the end of the 4th year: ₹5,00,000
Balance at the end of the last financial year: ₹6,00,000
You can withdraw 50% of ₹5,00,000, i.e., ₹2,50,000

Tip: If you don’t need the money urgently, let it compound for higher returns.

PPF Premature Closure

PPF comes with a 15-year lock-in period, but in specific cases, you can close it before maturity.

When Can You Close a PPF Account Prematurely?

Reason	Condition
Serious Illness	Self/spouse/children, with medical documents
Higher Education	Admission proof from a recognised university
Change in Residency	If you become an NRI (and have valid proof)

Premature Closure Penalty:

If you opt for premature closure, the interest earned is reduced by 1% from the applicable rate.

Example: If your PPF interest rate is 7.1%, the effective rate after premature closure will be 6.1%.

Tip: Avoid premature closure unless absolutely necessary. Even a small dip in interest can affect your long-term wealth.

PPF Withdrawal Rules After Extension

At maturity (after 15 years), you have 3 options:

Withdraw the Full Amount: No restrictions.
Extend Without Contribution: The account continues to earn interest.
Extend With Contribution: You can continue investing for 5 more years in blocks.

Partial Withdrawal Rules During Extension

Account Status	Withdrawal Rule
Extended Without Contribution	Unlimited withdrawals allowed
Extended With Contribution	One withdrawal per year, up to 60% of the balance at extension time

Tip: Extending your PPF account helps maximise compounding benefits.

Also Read: FD Vs PPF: How to Choose the Best Between Them?

How to Apply for PPF Withdrawals?

For partial withdrawal or maturity withdrawal, follow these steps:

Fill out Form C (for partial withdrawal) or Form 2 (for full withdrawal).
Submit the form to your bank or post office.
Provide supporting documents, if required (like medical or education proof for premature closure).
Wait for approval (typically takes a few working days).

PPF is a fantastic savings tool but knowing the withdrawal rules can help you make better financial decisions. If you don’t need the money urgently, keeping your PPF intact will ensure you get the full benefit of compounding. But if you do need funds, knowing your options can save you from penalties and financial stress.

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FAQs on PPF Withdrawal Rules

Can I withdraw 100% from PPF?

Yes, but only after 15 years when the account matures. You can withdraw the full amount, including principal and interest, without any restrictions. If you extend the account, withdrawal rules change.

How much may I withdraw from PPF every year?

Before maturity: 50% of the balance at the end of the 4th year or preceding year, whichever is lower.

PPF withdrawal rules after extension of 15 year:

Without contribution: Unlimited withdrawals.
With contribution: Up to 60% of the balance at the time of extension over 5 years.

Can PPF be closed prematurely?

Yes, under specific conditions like:

Medical emergencies (self/spouse/children)
Higher education (proof required)
Becoming an NRI

However, a 1% penalty on interest applies to the total amount.

How Can You Link a PAN Card With an EPF Account?

If you’re a salaried employee in India, you probably have an EPF account where a part of your salary is automatically saved every month. But did you know that linking your PAN card to your EPF can make managing your funds easier? It helps with smooth withdrawals and transfers become quicker when you switch jobs. This simple step saves you time and effort.

Let’s understand how to link your PAN to your EPF account.

Steps to Link PAN with EPF Account Online

Visit EPFO portal and log in

Go to the official EPFO portal – epfindia.gov.in. Login with your UAN and password credentials.

Go to ‘Manage’ tab

Once logged in, select the ‘Manage’ option from the main menu.

Click on ‘KYC’

Under the ‘Manage’ tab, click on the ‘KYC’ option to redirect to the eKYC page.

Select the document type

Under ‘document type’, you will see listed documents like PAN, Aadhaar etc. Click on the ‘PAN’ option.

Enter PAN card details

On the PAN section, enter your 10-digit Permanent Account Number (PAN) issued by the Income Tax Department.

Enter name and save

Provide your full name as per your PAN card and save the information.

Automatic PAN validation

Once you submit your name and PAN, it will be checked with the Income Tax Department automatically.

Confirmation of linking

After successful validation, your PAN will be linked to your EPF account. You will get an SMS and email for the confirmation.

Steps to Link PAN with EPF Account Offline

You can also link your PAN with your EPF account offline by visiting the nearest EPFO office. Here are the steps:

Get an EPF-PAN linking form

Visit the nearest EPFO branch office and get the physical EPF-PAN linking form.

Fill in the details

Fill the form with your personal details like full name, PAN, UAN, date of birth and mobile number accurately.

Attach documents

Attach self-attested photocopies of your PAN card and UAN letter with the filled linking form.

Submit form

Verify all details and submit the completed physical linking form along with documents to the EPFO officer.

Account linking & confirmation

The process will start by linking your PAN to your EPF account using your documents. Once linked, you will receive an SMS and email confirmation on your registered contact details.

How to Find PF Number Using PAN Card?

If you don’t know how to find PF number using PAN card, follow these easy steps to get it:

Step 1: Login to EPFO

Go to the EPFO portal and log in using your UAN and password.

Step 2: Click ‘Activate UAN’

On the homepage, click on the ‘Activate UAN’ button.

Step 3: Enter details

Fill in your PAN, name, date of birth, mobile number, and captcha code.

Step 4: Generate authorisation PIN

Select the ‘Get Authorisation PIN’ option to receive OTP.

Step 5: Enter OTP

An OTP will be sent to your registered mobile number. Enter this OTP.

Step 6: Validate and activate UAN

Click on ‘Validate OTP and Activate UAN.’

Step 7: Receive UAN details

Your UAN details and password will be sent to your mobile number.

Step 8: View PF account number

The Bottom Line

Linking your PAN card to your EPF account is a smart move! It makes things easier—like quick fund transfers, hassle-free tracking, faster claim settlements and smooth job switches.

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FAQs

Is it mandatory to link a PAN card with my EPF account?

Yes, it is mandatory to link your PAN card to your EPF account. The EPFO has made it compulsory to link the two to ensure proper maintenance and transparency of your EPF account. Without PAN linking, you may face issues while transferring funds or making withdrawals.

Can I withdraw my EPF funds without linking my PAN card?

You can withdraw your EPF funds even without linking your PAN card to the EPF account. However, if you initiate an EPF withdrawal without linking PAN, there will be a TDS (Tax Deducted at Source) deduction of 30% on the claim amount

Can I link my PAN card immediately after opening an EPF account?

Yes, you can link your PAN card to the EPF account immediately after opening one. In fact, it is recommended that you link your PAN as soon as you activate your Universal Account Number (UAN) and complete the KYC process. Early linking avoids hassles later.

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