Atal Pension Yojana (APY) is a Government sponsored pension scheme available to all citizens of India. The scheme mainly focuses on the unorganised sector in the country. APY comes under the administration of the Pension Fund Regulatory and Development Authority (PFRDA) within the umbrella of National Pension System (NPS).
The goal of the Atal Pension Yojana scheme is to give a sense of security to all Indian citizens such that they need not worry about any illness, accidents or diseases during old age. Apart from individuals belonging to the unorganised sector, employees working in the private sector or with an organization that does not provide pension benefits can also apply for the scheme.
The scheme guarantees a minimum monthly pension ranging between Rs.1,000 to Rs. 5,000 to the beneficiaries. Subscribers can choose a monthly pension of Rs. 1,000, Rs. 2,000, Rs. 3,000, Rs. 4,000 or Rs. 5.000, that starts post 60 years of age. The amount of pension that a beneficiary receives is linked to the age at which the individual joined APY and the monthly amount contributed.
Atal Pension Yojana is aimed at:
Some of the eligibility criteria to be met for availing the Atal Pension Yojana scheme are:
Here are the steps to be followed for opening APY account:
The Atal Pension Yojana account opening form can be obtained from a nearby bank branch that is a participant in the scheme. The application form can also be downloaded from various websites, such as the Pension Fund Regulatory and Development Authority (PFRDA) Official Website.
Alternatively, to avail the subscription form online, an applicant can check on various banking websites, including those of most major banks in India.
Some of the important points to note on contribution in APY account are:
Contributions to Atal Pension Yojana have to be made by requesting an auto-debit from the bank. If there is no sufficient account balance for successful auto debit, a penalty is levied as follows:
Here are the fees and charges applicable for APY account:
Intermediary | Activity | Relevant Charges |
Point of Presence | Registration | Rs.120 to 150 – depends on the number of subscribers |
Annual Recurring Charges | Rs. 100 per subscriber | |
Central Recordkeeping Agencies | APY Account opening charges | Rs. 15 per account |
Annual account maintenance charges | Rs. 40 per account | |
Custodian | Annual investment maintenance fee | 0.0075% for electronic & 0.05% for physical segment of assets under management |
Pension Fund Managers | Investment maintenance Fee (per annum) | 0.0102% of assets under management |
Since APY schemes offer guaranteed pension, the investment details matter less as compared to NPS. The returns from investment matter if the returns exceed the guaranteed pension amount. A higher pension amount or higher returns for nominees are available only in case of death of the subscriber. Here is how the APY funds are invested:
The Atal Pension Yojana comes with a wide range of benefits for subscribers. Here are some of the key benefits to be availed from this pension scheme:
Atal Pension Yojana is a government sponsored pension scheme that offers tax exemption benefits of up to Rs. 1.5 lakhs annually under Section 80C of the Income Tax Act, 1961. APY investment also qualifies for additional benefit of up to Rs. 50,000 annually under Section 80CCD (1) of the Income Tax Act, 1961.
Atal Pension Yojana comes as a financial planning saviour for individuals working in the unorganised sector. It allows investors to make affordable contributions and reap the benefits of the same through retirement pension. This scheme can be put to good use by all those who would like to put aside a certain portion of their income for retirement.
Withdrawal from APY can be made either upon attaining 60 years of age or due to death of the subscriber or under exceptional scenarios for those under 60 years of age.
The status of contributions to APY is intimated to the registered mobile number of the subscriber through periodical SMS alerts.
A subscriber can open only one APY account, and it is unique per subscriber.
Non-maintenance of savings account balance for contribution to APY is considered as default. Additional amount is collected by banks for delayed payments. For example, Re. 1 per month is collected for every Rs. 100 of contribution.
APY subscribers can decrease or increase contribution amount as per the available monthly pension options. However, this option can be exercised once in a year.
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