Saving for your old age is of utmost importance. The government of India has launched multiple schemes to help people save up for their retirement. Here, we will look at two such schemes, the APY and the NPS.

APY vs NPS - What are they?

APY stands for Atal Pension Yojana and NPS stands for National Pension System. Both of these are retirement schemes launched by the government of India. While APY is a pension scheme, NPS is a voluntary retirement savings scheme. 

Let’s look at each of them in detail.

What is APY?

The Atal Pension Yojana was launched by the government of India in 2015. It is meant to offer security to people who have a low income and do not have access to formal pension schemes. 

Here are some details about the scheme - 

What is NPS?

The National Pension System was launched by the government of India in 2004. It is a voluntary long-term investment scheme that is available to employees from the public, private, and unorganized sectors. 

Here are some more details about the scheme - 

Difference Between NPS and APY

Let us now take a look at some of the differences between the Atal Pension Yojana vs NPS -

Criteria APY NPS


For people from ages 18 to 40 

For people from ages 18 to 65


Only resident Indians

Both resident and non-resident Indians

Types of Accounts

Only one type of account can be opened

Two types of accounts can be opened, Tier-1 and Tier-2 

Guaranteed Pension



Tax Benefits



Premature Withdrawals


Yes, but only for Tier-2 accounts

Freedom to Choose Where to Invest



Government Contribution

Yes, but for accounts opened before 31st December, 2021


Similarities Between APY vs NPS

Even though APY and NPS have major differences, they have similarities. They are as follows - 


The government of India launched the Atal Pension Yojana and National Pension System so that people can save funds for their retirement age. Both these schemes let you save money during your working years so that you are financially secure after you have retired or attained old age.

If you are looking for a higher corpus amount and don’t mind certain risks, you can invest money in the NPS. But if you prefer receiving a sure pension between Rs.1,000 to Rs.5,000 without any risks involved, the APY will be a better choice for you.

At the end of the day, which scheme you choose to invest in depends on your personal preference. Opening an account in both schemes is equally easy, and doesn’t involve any hassles.

Emergency funds can be required at any phase of your life, and it is good to be prepared for it. But sometimes, you might require funds urgently for a circumstance that you were not prepared for. In such cases, you can opt for instant personal loans from moneyview.

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NPS vs APY - Related FAQs

Yes, you can have both APY and NPS accounts.

You can invest up to Rs.2 Lakh in the NPS Tier-1 account.

Yes, you can invest both as lumpsum and SIP in the NPS account.

Yes, salaried people can invest in NPS.

The PPF is completely government-backed and thus there are fewer risks involved, but you get lower returns. On the other hand, NPS gives better returns. In the end, which is better, depends on personal preferences and situations.

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