What is Pradhan Mantri Jan Dhan Yojana and 7 reasons why you should sign up for it
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What is Pradhan Mantri Jan Dhan Yojana and 7 reasons why you should sign up for it

  • Highlights

  • Life and personal accident insurance coverage

  • Overdraft facilities available after 6 months

  • Mobile banking ensures ease of access

  • Easy access to government-led pension schemes

The Pradhan Mantri Jan Dhan Yojna (PMJDY) is a scheme that hopes to offer comprehensive financial services to previously excluded sectors of the community. Any Indian national over the age of 10 years is eligible to apply. Here’s a list of reasons why you should consider enrolling under the scheme.

1. No minimum balance required

In an effort to be truly inclusive to all sections of society, the PMJDY does not have a minimum balance requirement for enrolment. Zero-balance accounts are also eligible for the PMJDY scheme. Any deposit made into the account will also accrue interest at a rate similar to that of other banks.

2. Direct transfer of subsidies

Before the PMJDY scheme was initiated, all government welfare subsidy payments (for example, LPG subsidies) were made through the issuance of cheques, or even with cash. This undoubtedly contributed to fraud, or at the very least, made it difficult for many people to obtain their subsidy payments. The PMJDY will ensure that all subsidy payments are made directly to your bank account.

3. Money transfer made easy

In a bid to bring financial services to all citizens, including those who live in otherwise inaccessible locations, the PMJDY has introduced mobile banking for all phones—and not just smart phones. Bank transactions are a lot easier and more accessible this way. Moreover, all participating banks are linked via the core banking solution or CBS, which makes inter-bank transfers a whole lot easier.

4. Access to need-based loans

Six months after you successful operate a PMJDY account, you can avail of an overdraft facility for up to Rs.5000. Upon successful repayment of this loan, the overdraft limit may be extended to Rs.15,000, upon your bank’s discretion. So, you can access money during emergencies with ease.

5. Life insurance coverage of up to Rs.30,000

If you have opened your account before January 31st, 2015, and are an earning member of your household, you may be eligible for life insurance coverage. Upon meeting certain eligibility criteria, your household can benefit from life insurance coverage of up to Rs.30,000.

6. Accidental insurance coverage of Rs.1 lakh

In the case of accidental death, the scheme offers coverage of up to Rs.1 lakh, provided there have been transactions on the account prior to the date of the accident.

7. Pension scheme

Holding a Jan Dhan account makes access it easier for previously excluded sectors of society to access government-led pension schemes. Beneficiaries will be able to receive payment directly into their Jan Dhan linked-accounts as well.

In these ways, the PMJDY creates financial well-being for people in urban and rural India who have not yet benefitted from banking and services.

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