Tuesday, 19 May 2020

What is Atal Pension Yojana (APY)?

What is Atal Pension Yojana (APY)?

Atal Pension Yojana (APY) is a guaranteed pension scheme for the citizens of India, focused on unorganized sector workers such as maids, drivers, gardeners etc. This scheme was launched by the Government of India in June 2015. 

The scheme aims to help weaker section to save up money for their old age while they are working and get a guaranteed monthly pension post-retirement. In this post, let’s take a look at the features and eligibility of Atal Pension Yojana (APY).



Atal Pension Yojana (APY)

The scheme is administered by the PFRDA (Pension Fund Regulatory and Development Authority) through the National Pension System (NPS).

 Under this scheme, a fixed guaranteed minimum pension of Rs. 1,000/-, 2,000/-, 3,000/-, 4,000/- and 5,000/- per month will be given on attaining the age of 60 years. 

The pension will be determined based on your age and the contribution made by you.



Features of Atal Pension Yojana (APY)

1. Under APY, there is a guaranteed monthly pension ranging from Rs 1000 to 5000 per month to the subscriber on attaining the age of 60 years.
2. The benefit of minimum pension would be guaranteed by the Government of India.
3. The government of India will also co-contribute 50% of the subscriber’s contribution or Rs. 1000 per annum, whichever is lower, for a period of 5 years who joined the scheme in the period June 01, 2015 to March 31, 2016.
4. Government co-contribution is available for those only who are not covered by any Statutory Social Security Schemes and is not the income tax payer.
5. All bank account holders can join Atal Pension Yojana (APY).



Eligibility criteria for Atal Pension Yojana (APY)

You need to fulfill the below-mentioned requirement to avail benefits from the Atal Pension Yojana (APY):
1. All citizen of India between the age of 18 to 40 years.
2. The applicant must have a valid savings bank account / open a savings bank account.
3. Aadhaar will be the primary KYC but it is not mandatory to provide Aadhaar number for opening an APY account.
4. Aadhaar and mobile number are recommended to be obtained from subscribers at the time of opening the APY account. If not available at the time of registration, Aadhaar details may also be submitted at a later stage.
5. The minimum contribution that anyone has to do is at least 20 years.

How to open Atal Pension Yojana (APY) Account?

Follow the below-given steps to open Atal Pension Yojana (APY) account
1. All nationalized banks provide Atal Pension Yojana (APY). Go to the bank branch where you have your savings bank account.
2. Fill the Atal Pension Yojana (APY) registration form and submit it to your bank.
3. Provide your Aadhaar / Mobile Number.
4. Ensure to keep the required balance in your savings bank account for the transfer of monthly contribution.
5. Some banks are also offering to enroll for APY through net banking facility.

Nomination in Atal Pension Yojana (APY)

It is mandatory to provide nominee details in Atal Pension Yojana Account. The spouse details are also compulsory wherever applicable. Their Aadhaar number is also to be provided.

Mode of contribution to Atal Pension Yojana (APY) Account

Contributions are to be remitted monthly through auto-debit facility from your savings bank account. The due date for monthly contribution will be as per the initial date of deposit of contribution into APY account.

Benefits of Atal Pension Yojana (APY) 

1. Under APY, there is a guaranteed monthly pension ranging from Rs 1000 to 5000 per month to the subscriber on attaining the age of 60 years, until the death of the subscriber.
2. After the death of the subscriber, the spouse shall be entitled to get the same amount of pension until the death of the spouse.
3. After the death of the subscriber and his/her spouse, the nominee will receive the entire pension money that the subscriber had accumulated till 60 years of age.
4. If the subscriber dies before 60 years, the spouse will have the choice to either exit from the scheme and claim the entire accumulated money or continue to maintain the account in subscriber's name for the remaining vested years. The spouse shall be entitled to receive the same amount of pension as the subscriber until the death of the spouse in the latter case.

Monthly Contribution in Atal Pension Yojana (APY)

Atal Pension Yojana is a periodic contribution based pension scheme. There is a guaranteed monthly pension ranging from Rs. 1000 to 5000 per month to the subscriber after their retirement at the age of 60. Your monthly contribution depends upon the amount of monthly pension you want and the age when you start your contribution.
Indicative APY Contribution Chart (Age-wise)
What is Atal Pension Yojana (APY)?


Penalty Charges in Atal Pension Yojana (APY)

Non-availability of the required balance in your savings bank account for the contribution in APY on the specified date will be considered as default. Banks can levy penalty charges for delayed payments as stipulated by the Government. Such penalty charges will vary from minimum Re 1 per month to Rs 10/- per month as shown below:
1. Re. 1 per month for a contribution up to Rs. 100 per month.
2. Re. 2 per month for contribution between Rs. 101 to 500/- per month.
3. Re 5 per month for contribution between Rs 501/- to 1000/- per month.
4. Rs 10 per month for contribution beyond Rs 1001/- per month.

In the case of discontinuation of payments of contribution shall lead to the following:
1. After 6 months the subscriber’s account will be frozen.
2. After 12 months the subscriber’s account will be deactivated.
3. After 24 months subscriber’s account will be closed.
Subscriber should ensure that the savings bank account to be funded enough for auto debit of contribution money. The amount of penalty will remain as part of the pension corpus of the subscriber.


Exit from Atal Pension Yojana (APY)?

1. Exit on attaining the age of 60 years: Exit from APY is permitted with 100% annuitisation of pension wealth. Monthly pension of Rs 1000 to 5000 per month to the subscriber, until the death of the subscriber. 

After the death of the subscriber, the spouse shall be entitled to get the same amount of pension until the death of the spouse. 

After the death of the subscriber and his/her spouse, the nominee will receive the entire pension money that the subscriber had accumulated till 60 years of age.
2. Exit Before attaining the age of 60 Years: Exit from APY before 60 years of age is not permitted. However, it is permitted only in exceptional circumstances i.e. in the event of the death of subscriber or terminal disease.





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What is Atal Pension Yojana (APY)?


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