In 2015, the Central government launched the Atal Pension Yojana (APY) with an aim to provide pension to workers in the largely unorganized sector of India. This is a superb scheme for you to get an assured pension from the Indian government, if you’re looking for an income upon retirement at the age of 60 years.
How Atal Pension Yojana Works?
Atal Pension Yojana (APY) is open to all bank account holders. As a bank account holder, you’ll have to contribute money to the scheme, as I highlight below
The Central Government would also co-contribute 50 percent of the total contribution or Rs. 1000 per annum, whichever is lower, to each eligible subscriber, for a period of five years, which is from Financial Year 2015- 16 to 2019-20, who join the APY before 31st December, 2015, and who are not members of any statutory social security scheme and who are not income tax payers.
Therefore, Atal Pension Yojana (APY) focuses on all citizens in the unorganized sector. Under APY, 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.
Also, through the APY, the subscribers would receive the fixed minimum pension of Rs. 1000 per month, Rs. 2,000 per month, Rs. 3,000 per month, Rs. 4,000 per month or Rs. 5,000 per month, at the age of 60 years, depending on their contributions, which itself would be based on the age of joining the APY.
Therefore, the benefit of minimum pension would be guaranteed by the Government. However, if higher investment returns are received on the contributions of subscribers of APY, higher pension would be paid to the subscribers.
A subscriber joining the scheme of Rs. 1,000 monthly pension, at the age of 18 years would be required to contribute Rs. 42 per month. However, if he joins at age 40, he has to contribute Rs. 291 per month. Similarly, a subscriber joining the scheme of Rs. 5,000 monthly pension, at the age of 18 years would be required to contribute Rs. 210 per month.
However, if he joins at age 40, he has to contribute Rs. 1,454 per month. Therefore, it is better to join early in the scheme.
The minimum age of joining APY is 18 years and maximum age is 40 years. Therefore, minimum period of contribution by any subscriber under APY would be 20 years or more.
How to Open a Atal Pension Yojana Account
Opening an Atal Pension Yojana is very simple and fast. Follow these steps if you’re interested in opening an Atal Pension Yojana account.
- Visit your bank and fill out the Atal Pension Yojana form.
- Give the bank, standing instructions to debit the monthly amount directly from your account.
- The bank will issue a confirmation about the transactions, through email statements or on your passbook.
- You have to appoint a nominee to receive the invested amount after you pass away. Or you can withdraw the entire amount upon attaining the age of 60. However, it’s best to appoint a nominee due to uncertainties of life.
Banks Offering Atal Pension Yojana Accounts
If you’re interested in opening an Atal Pension Yojana account, here’s a list of banks where you can avail the facility.
- Bank of India
- State Bank of India
- Post Office bank
- Central Bank of India
- Union Bank of India
- Indian Bank
- Indian Overseas Bank
- Punjab National Bank
- Canara Bank
- Bank of Maharashtra
- ICICI Bank
- HDFC Bank
- Yes Bank
- IndusInd Bank
- Axis Bank
- IDBI Bank
Due to popularity of the scheme, the Indian government has also allowed some Regional Rural Banks (RRBs) that have branches in rural parts of the country to open APY accounts. However, these accounts will be held at banks that sponsor the RRB.
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Atal Pension Yojana (APY) at India Post Bank
Most people prefer opening an Atal Pension Yojana account at the post office. This is a very simple process, since a post office would be available easily near your location.
To open an APY account at post offices, follow these simple steps.
- Visit your nearest post office.
- Open a savings bank account at the post office.
- You will require complete Know Your Customer (KYC) formalities to open such an account.
- This means, you’ll to submit copies of your Aadhar card or driving license, passport or any other proof for your address along with a photo ID proof for your identity.
- The post office will also ask you for three passport sized photographs to open a savings bank account.
- Depending on your location, a post office will open your savings bank account within three to 10 days.
- That’s because if you’re opening a postal savings account at a smaller post office, the account details have to be submitted and approved by the local Sub Office of India Post.
- Once you get the savings bank account number and passbook, approach the post office once again.
- Here you will have to enroll for the APY scheme by filling out the specific form.
- The amount of money for your APY scheme subscription will be debited directly from your savings account every month.
- Therefore, remember to maintain that much balance in your bank account.
Atal Pension Yojana (APY) Overview
|Scheme / Yojana Name||Atal Pension Yojana|
|Yojana Beneficiaries||All citizens in the unorganized sector|
|Page Category||Sarkari Yojana|
|Scheme Objective||Atal Pension Yojana (APY) with an aim to provide pension to workers in the largely unorganized sector of India.|
|APY Form||Download Here|
|Important Links||Click here|
Payment of Pension Under Atal Pension Yojana (APY)
You can opt for monthly, quarterly or annual payment of pension from your Atal Pension Yojana account, upon attaining the age of 60.
There’re no premature withdrawals of money you credit in an APY account. The money will be paid to your nominees after you pass away.
However, you can opt out of the APY scheme upon attaining the age of 60 and withdraw your entire investment, along with the regular interest of 4.45 percent per annum.
As we can see, the Atal Pension Yojana is an ideal alternative for persons that work in the largely unorganized sector and have no pension benefits from their employers.
As I mention earlier, the monthly installments for an APY scheme subscription are also very low and would depend upon your age at the time of opening the account. However, if you’re under 40, I would recommend you to open an APY account.