It’s Good That NPS Isn’t As Liquid As Mutual Funds, Says Sriram Iyer

If you look at the lifetime value of NPS, people normally don’t exit; they may switch from one option to another. We don’t see premature withdrawal either, except a sliver. To that extent, NPS has stickiness, which is good for compounding, and that benefits distributors, too. In mutual funds, for instance, the impulses of an individual matter, but NPS doesn’t allow that. It’s good that NPS is not as liquid as, say, mutual funds, as it allows you to make double-digit returns, if you have the right asset allocation and the right fund manager.