Within the National Pension System (NPS) offering, Tier-2 account has been slowly gaining the attention of investors. While the overall AUM of Tier-1 account reached Rs 90,000 crore in October 2022, Tier–2 accounts accumulated only Rs 3,757 crore. It is an optional account for the Tier-1 subscribers, which can be used for accumulating wealth for other goals. It provides flexibility to add and withdraw money at any time. It scores on lower cost over mutual funds as total expense charged under the scheme is less than 20 basis points. Also, you can switch between pension fund managers without attracting capital gains tax, unlike with mutual funds.
