In a significant move to streamline long-term financial planning for retail investors, the Securities and Exchange Board of India (SEBI) has introduced a new category of mutual funds: Life Cycle Funds . These funds are designed to automatically adjust their risk profile as an investor approaches a specific target year, offering a "set it and forget it" solution for milestones like retirement or a child’s education. Here is everything you need to know about these new schemes and how they will function. What are Life Cycle Funds? Unlike traditional mutual funds that maintain a consistent investment strategy, Life Cycle Funds are defined by a specific maturity date . As the fund approaches this date, the Asset Management Company (AMC) systematically shifts the portfolio from high-risk, high-reward assets (Equity) to safer, more stable assets (Debt). To ensure transparency, SEBI has mandated that the maturity year must be part of the fund's name for example, "Life Cycle ...
When it comes to retirement planning in India, the National Pension System (NPS) has become one of the most popular investment options—thanks to its flexibility, tax benefits, and decent historical returns. If you're trying to figure out whether to open a Tier 1 or Tier 2 NPS account, what asset allocation works best, or how to get the most tax advantage, this guide will give you clarity—without jargon. Tier 1 vs Tier 2 NPS Accounts: What’s the Difference? Tier 1: The Core Retirement Account Mandatory for tax benefits Lock-in till age 60 Tax benefits under Sections 80CCD(1) , 80CCD(1B) , and 80CCD(2) Partial withdrawals allowed under specific conditions Tier 2: Optional, More Flexible Voluntary —requires a Tier 1 account first No lock-in (except 3 years for 80C deduction) No tax benefit under the new tax regime Great for short-to-medium term investments if you can handle market volatility Active vs Auto Choice in NPS: What Should You Pick? ...