ELSS Funds come with a lock-in period of just three years. After this period, you can withdraw your entire investment along with any returns earned during this time. This makes them a relatively short-term option for tax savings and potential wealth growth.
On the other hand, NPS (National Pension System) is primarily designed for long-term retirement planning. While partial withdrawals are allowed before the age of 60—up to 25% of your contributions—this is only permitted for specific purposes like medical emergencies or your children’s education. However, it's important to note that you can only withdraw up to 25% of your own contributions, not the entire account balance.
Upon reaching retirement, you can withdraw 60% of your accumulated corpus tax-free. The remaining 40% must be used to purchase an annuity, which provides you with regular payouts throughout your retirement.
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