Yes! You can invest in both APY and NPS simultaneously. This diversification strategy gives you a guaranteed pension from APY plus potential for higher returns from NPS. Many financial advisors recommend this approach for comprehensive retirement planning.

NPS has significantly better tax benefits. NPS offers deductions under 80C (₹1.5L), additional 80CCD(1B) (₹50K), and employer contribution under 80CCD(2). APY only offers ₹50K under 80CCD(1B). For someone in 30% tax bracket, NPS can save up to ₹60,000 in taxes annually.

At age 35, you're still eligible for APY but it's less attractive. For ₹5,000 pension, you'll pay ₹902/month (₹3.25L total). Instead, the same amount in NPS could give you ₹15,000-₹20,000/month pension with better tax benefits. Consider NPS unless you specifically need guaranteed pension for peace of mind.

No, APY does not allow premature withdrawal except in case of death or terminal illness. If you exit early, you only get your contributions back with savings bank interest (3-4%), not the pension benefit. NPS allows partial withdrawal (25%) after 3 years for specific purposes.

APY remains excellent for: (1) Unorganized sector workers with irregular income, (2) People aged 18-25 (very low contributions), (3) Risk-averse individuals wanting guaranteed pension. However, for salaried employees or those above 30, NPS typically offers better value due to higher potential returns and superior tax benefits.