NPS returns: What are the top performing National Pension System funds in 1 year?

NPS returns: As per data from the NPS Trust website, the one-year returns under Scheme - E Tier-I as of 14th August 2025 show considerable variation across different pension fund managers.

DSP stands out as the top performer with a return of 7.15%, significantly outperforming all other funds. Kotak follows with a return of 3.37%, while HDFC, ICICI, LIC, and UTI delivered moderate gains, ranging from 1.26% to 1.81%.

On the lower end, Axis, Tata, and Aditya Birla posted minimal returns, all under 0.6%. SBI was the only fund manager to report a negative return of -1.57%, clearly underperforming compared to its peers.

Scheme - E under the National Pension System (NPS) primarily invests in equity markets, meaning it's linked to stock market performance.

What is NPS?

Tier-1: Mandatory for retirement, has restrictions on withdrawal and offers tax benefits.

Tier-2: Optional, works like a mutual fund with no tax benefits (except for government employees) and full withdrawal flexibility.

At retirement, you can withdraw up to 60% of your corpus tax-free, and use the remaining 40% to buy an annuity for a regular pension.

"Under the current tax rules, your employer’s contribution to your NPS account is first included in your total income. However, an equivalent deduction is allowed under Section 80CCD(2) in both the old and new tax regimes. Previously, only central government employees could claim a deduction of up to 14% of their salary for employer contributions. To make the new tax regime more appealing to salaried individuals, the government, in Budget 2024, extended this 14% deduction limit to all categories of employees, up from the earlier 10%," explained Mumbai-based tax and investment expert Balwant Jain.