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All You Need To Know About The Atal Pension Yojana Scheme

  • Highlights

  • Launched in 2015, APY is a government pension scheme

  • Both you and the government contribute to your APY account

  • You cannot exit the scheme until you are 60 years old

  • Grow your pension by starting a Bajaj Finance FD

The unorganised sector in India constitutes over 90% of the Indian workforce. This segment enjoys very few benefits, and keeping this aspect in mind, the Government of India launched the Atal Pension Yojana Scheme.

The Atal Pension Yojana Scheme is designed to help Indian citizens secure their post-retirement years easily. The scheme requires monthly contributions made by both, you and the government in fixed amounts. The amount you contribute depends on the pension payout amount you wish to receive, ranging from Rs. 1,000 per month to Rs. 5,000 per month.

To give you further insight into the workings of this scheme, here are answers to the most commonly asked questions regarding the Atal Pension Yojana.

Who can benefit from Atal Pension Yojana Scheme?

This scheme is available to all citizens of India. Apart from being an Indian citizen, your annual income cannot qualify for income tax. Hence, individuals who are a part of the tax bracket, cannot benefit from the Atal Pension Yojana Scheme. Similarly, you cannot be the member of any Statutory Social Security scheme in order to avail the benefits of this pension scheme.

What are the eligibility criteria for this scheme?

To be eligible for the Atal Pension Yojana Scheme, you need to be aged between 18 and 40 years. Once you qualify basis the age criteria, you will have to be KYC compliant as per the terms of the scheme, which means you need to possess a valid Aadhaar card clearly noting down your date of birth and other information.

Apart from this, when enrolling for the scheme you need to clearly state all details pertaining to your dependents and nominees. However, you will be automatically eligible for the AYP scheme as a member of the Swavalamban scheme. 

What is the minimum monthly contribution?

The minimum monthly contribution is broken down into two parts – your contribution and that made by the Government of India. The minimum monthly contribution mainly depends on your age of entry and the pension payout you wish to receive. For example, if you choose to enter the scheme at 25 choosing a monthly payout of Rs. 1,000, your monthly contribution will be Rs. 76.

What are the penalties for non-payment?

Your portion of monthly contribution for AYP is auto-debited from your savings or current bank account. Thus, at the start of the policy you need to link your bank account to your Atal Pension Yojana Scheme and remember to keep your bank account funded for all future deductions. Non-maintenance of adequate balance will incur penalties. These penalties range from Re. 1 to Rs. 10 per month.

The breakdown for these payments is as follows:
- Re. 1 per month when your contributions amount to Rs. 100 per month.
- Rs. 2 per month when your contributions are between Rs. 100 and Rs. 500 per month.
- Rs. 5 per month when your contributions are between Rs. 501 and Rs. 1,000 per month.
- Rs. 10 per month when your contributions are beyond Rs. 1,001 per month.

The government will freeze your account, owing to 6 months of non-payment. If you do not contribute for 12 to 24 months, then it will lead to deactivation or closure of the account.

What is the exit policy for this scheme?

The minimum investment tenor for this scheme is 20 years, as you can’t make investments post 40 years of age. Exit before the age of 60 is not permitted under this scheme, except in case of terminal illnesses or death. In case of your death, your nominees can access the pension corpus.

Secure your retirement years by investing in a pension scheme in your working years. Additionally, an FD is a good fit in this case because it can give you monthly payout, much like the APY. It is a safe investment that guarantees returns because of its fixed interest rate. When choosing to invest in an FD, consider investing in a Bajaj Finance Fixed Deposit as it has the highest CRISIL (FAAA) and ICRA (MAAA) stability ratings and offers one of the highest interest rates in India.

At interest rates up to 8.95% for senior citizens and 8.60% for regular investors for an FD started for a tenor of at least 3 years with interest payable at maturity, you’re guaranteed significant returns, as you also enjoy the benefit of compounding. You can also start small as the Bajaj Finance FD has a minimum investment amount of Rs. 25,000. Apply online and safeguard your golden years with an FD.

DISCLAIMER: The mentioned fixed deposit interest rates are indicative only, and may be subject to change periodically. Please check the interest rates on our website.

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