Late Mr. Arun Jaitley, the former Finance Minister of the Government of India, is the mega mind behind the scheme of Atal Pension Yojana aka APY. This scheme falls under the umbrella scheme of the Pradhan Mantri Jan Dhan Yojana (PMJDY) of the National Pension Scheme (NPS) and is managed by The Pension Funds Regulatory Authority of India (PFRDA). The idea of this pension scheme was first introduced in the budget session of 2010-11. It was initially discontinued only to be re-launched on May 9, 2015 by the Hon’ble Prime Minister of India.
Atal Pension Yojana is basically the rebirth of the Swavalamban Yojana and primarily aims at securing the retirement life of the unorganised sector like that of maids, house hold helpers, delivery associates, etc.
Overview of the Atal Pension Yojana Scheme
After the Pradhan Mantri Jan Dhan Yojana which opened bank accounts for most people of the under-developed sections of the society, Atal Pension Yojana aims at opening pension accounts for individuals who are not benefitted by PF from their employers. This scheme primarily targets individuals working in the unorganised sector.
This is a 50-50 partnership in contribution. Applicant’s opting for the Atal Pension Yojana have to pay a minimum of Rs. 1,000. The government will contribute Rs. 1,000 or 50% of the contribution made by the pensioner, whichever is less. You can start your contribution from the age of 18. The maximum age at which you can start is 40 years. So, a minimum contribution of 20 years is mandatory. When you attain the age of 60 years, you can avail a guaranteed pension per month with a minimum of Rs. 1,000 to a maximum of Rs. 5,000, depending on the amount you have contributed.
The government-end contribution was only available from 2015 to 2019 for a total period of 5 years to subscribers who had joined APY between June and December, 2015. Note that this scheme is limited to individuals who are also not part of any social security scheme or pay taxes. The scheme still continues and will do so since this falls under the Union budget and is considered as one of the best investment plans in India.
APY Eligibility Criteria
The eligibility criteria to open an APY account –
- Any non-tax payer is eligible for APY.
- Has to be an Indian citizen.
- Age should be between 18 years and 40 years.
- Minimum contribution must be for 20 years.
- Aadhaar must be linked to your bank account.
- Should have a mobile number that is to be linked with your bank account.
Fundamental Terms and Conditions
There are certain terms and conditions which apply to the APY scheme which every prospective or current applicant should know, viz. –
- In case of demise of the pension holder, his/her spouse can claim the pension amount. If both the spouse and the subscriber pass away, the nominee can withdraw the pension.
- In case the pensioner dies before the age of 60 years, his/her spouse can choose to continue with the contribution, or exit the scheme and withdraw the amount collected so far.
- As these pension contributions are on a monthly basis, the funds will be deducted from your bank account automatically.
- The premiums are flexible. You just have to contact your bank manager for that.
- Penal charges are applicable as per monthly deposit amounts chosen by the borrower.
- If no contribution is made for 6 months, the account is frozen and if that continues for a year, the account is closed and the funds accumulated are paid to the pension account holder.
- Withdrawal is allowed only in case of demise under critical conditions.
- Your pension contribution along with interest will be given back to you in case you close your account before you turn 60 years. You will not be able to avail the government’s share of contribution or any interest on that.
- Last date of joining is before 1st of June of every year.
- These contributions are tax exempted under section 80 CCD.
- The pension amount can be changed only once a year in April.
With this scheme, applicants can choose the percentage of their incomes they would like to contribute. It is vital to know how much income you can save or invest via such a scheme as well as the expected returns. Financial planning is the key to benefit the most from such savings or investment schemes.
Atal Pension Yojana Application Process
If you are an eligible candidate, you can easily apply for this scheme by following these steps mentioned below –
- Visit any nationalised bank to apply for the Atal Pension Yojana scheme.
- Fill up the application form with the requisite information and submit it.
- You only require your Aadhaar card for document submission.
- The first contribution is automatically deducted from your savings account when the pension account is opened.
- PAN No. will be issued by the bank as an acknowledgement.
The Indian government has launched several investment plans in India. These government-funded investment avenues are considered among the best saving schemes in India for various risk profiles.
You can additionally consider fixed deposits to earn high returns against your invested funds. Financial institutions such as Bajaj Finance offer Fixed Deposits at attractive rates of interest with guaranteed security of your invested funds.