Atal Pension Yojana (APY) is a government-backed pension scheme launched by the Government of India in 2015. The scheme is aimed at providing a steady stream of income to Indian citizens in their old age, particularly those working in the unorganised sector.
Under the Atal Pension Yojana, subscribers can contribute a certain amount of money on a monthly, quarterly, or yearly basis, depending on their convenience.
The contributions are then invested in a pension fund managed by the Pension Fund Regulatory and Development Authority (PFRDA). The amount of pension received by the subscriber at retirement is determined by the contributions made and the returns earned on those contributions.
The scheme is open to all Indian citizens between the ages of 18 and 40 years. From October 01, 2022, any citizen who is or has been an income-tax payer, is not eligible to join APY.
The pension amount ranges from Rs. 1000 to Rs. 5000 per month, depending on the contributions made by the subscriber. In the event of the subscriber’s death, the pension amount is transferred to the nominee.
Need for Pension:
- Decreased income earning potential with age.
- The rise of nuclear family
- Migration of earning members.
- Rise in cost of living.
- Increased longevity.
- Dignified life in old age due to less financial dependence.
Atal Pension Yojana
- The Atal Pension Yojana (APY) was launched to create a universal social security system for all Indians, especially the poor, the under-privileged and the workers in the unorganised sector.
- APY is open to all bank account holders in the age group of 18 to 40 years and the contributions differ, based on the pension amount chosen. Provided that from October 01, 2022, any citizen who is or has been an income-tax payer, shall not be eligible to join APY
- Subscribers would receive the guaranteed minimum monthly pension of Rs. 1000 or Rs. 2000 or Rs. 3000 or Rs. 4000 or Rs. 5000 at the age of 60 years.
- The monthly pension would be available to the subscriber, and after him to his spouse and after their death, the pension corpus, as accumulated at age 60 of the subscriber, would be returned to the nominee of the subscriber.
- In case of premature death of subscriber (death before 60 years of age), spouse of the subscriber can continue contribution to APY account of the subscriber, for the remaining vesting period, till the original subscriber would have attained the age of 60 years.
The minimum pension would be guaranteed by the Government, i.e., if the accumulated corpus based on contributions earns a lower than estimated return on investment and is inadequate to provide the minimum guaranteed pension, the Central Government would fund such inadequacy. Alternatively, if the returns on investment are higher, the subscribers would get enhanced pensionary benefits.
- Subscribers can make contributions to APY on a monthly/ quarterly / half-yearly basis.
- Subscribers can voluntarily exit from APY subject to certain conditions, on deduction of Government co-contribution and return/interest thereon.
What is the procedure for opening an APY Account?
Approach the bank branch/ post office where an individual’s savings bank account is held or open a savings account if the subscriber doesn’t have one.
Whether an Aadhaar Number is compulsory for joining the scheme?
Atal Pension Yojana (APY) has now been included under the Section 7 of the Aadhaar Act.
As per the provisions of the Act, any individual who is eligible to receive such benefits under the APY will have to furnish proof of possession of Aadhaar number or undergo enrolment under Aadhaar authentication. Hence, it is desirable to provide Aadhaar Number for proper identification of the subscriber.
Can you open an APY Account without a savings bank account?
No, the savings bank account/ post office savings bank account is mandatory for joining APY.
Is it required to furnish a nomination while joining the scheme?
Yes. It is mandatory to provide nominee details in an APY account.
How many APY accounts can you open?
A subscriber can open only one APY account. Multiple APY accounts are not permitted.
Can minors open an APY account?
No. A minor cannot open an APY account.
Whether NRI is eligible to open an APY Account?
Yes, NRI in the age group 18-40 years of age having a bank account with APY POP is eligible to open an APY account.
Is there any helpline number dedicated to APY Scheme where queries related to APY Scheme can be addressed?
The Toll Free Helpline number for APY Scheme is 1800-110-069
Whether exit from the APY Scheme is permitted before 60 years of age? If yes, what are the benefits?
Yes, voluntary exit under APY before 60 years of age is permitted. The subscriber shall only be refunded the contributions made by him to APY along with the net actual accrued income earned on his contributions (after deducting the account maintenance charges).
However, in case of subscribers who joined the scheme before 31st March 2016 and received government co-contribution shall not receive the government co-contribution and the accrued income earned on the same, if opted for voluntary exit before 60 years.
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