Atal Pension Yojana

What is Atal Pension Yojana?

  • This is a pension scheme mainly aimed at the unorganized sector. There is an option of getting a fixed pension of ₹ 1000, ₹ 2000, ₹ 3000, ₹ 4000, or ₹ 5000 on attaining the age of 60. The pension corpus is created from your contributions that are invested in different assets.
  • The collected amount under the scheme is managed by the Pension Fund Regulatory and Development Authority of India (PFRDA). The pension is determined based on the individual’s age and the contribution amount. The contributor’s spouse can stake claim to the pension upon the contributor’s death. Upon the death of both the contributor and his/ her spouse, their nominee will be given the accumulated corpus.
  • If the contributor dies before completing 60 years of age, the spouse is also given an option to exit the scheme and claim the corpus. Otherwise, they can continue the scheme for the remaining period. Interestingly, the government makes a co-contribution of 50% of the total contribution, or ₹ 1000 per annum to all eligible subscribers who had joined between June 2015 and December 2015.
  • The government co-contribution is for a period of 5 years up to 2019-20. Only those subscribers will get co-contribution who are not part of any other statutory social security schemes, or are paying income tax. An Atal Pension Yojana subscriber has to be an Indian citizen between the age of 18-40, and has to make contributions for a minimum of 20 years. All the top banks provide the scheme. You can visit any of these bank branches to start your APY investment journey. You can initiate the opening process online as well.
  • APY is an automatic investment scheme. All your periodic contributions will be debited automatically from your bank account. Any default on your payments will attract penalty. Default status on your payments for 6 months will lead to APY account being frozen. If the default continues for 12 months, then the account will be closed and the remaining amount will be paid back to the subscriber.
  • Do remember early withdrawal is not entertained in APY. Only in cases like death or terminal illness, the subscriber or his/her nominee can receive the entire amount back.
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