Atal Pension Yojana (APY)

Understand how Atal Pension Yojana helps secure retirement.
Atal Pension Yojana
4 mins
20 April 2024

The Atal Pension Yojana (APY) is an old age pension scheme, available to all Indian citizens, with a primary focus on unorganised sector workers.

Under APY, individuals can receive a guaranteed minimum pension of Rs. 1,000, Rs. 2,000, Rs. 3,000, Rs. 4,000, or Rs. 5,000 per month upon reaching the age of 60, determined by their contributions. The APY scheme is open to all Indian citizens, allowing anyone to become a member.

While the APY provides a valuable retirement safety net, consider diversifying your savings strategy for maximum financial security in your later years. Fixed Deposits (FDs) offer guaranteed returns with flexible tenures.

Objectives of the scheme

The Atal Pension Yojana aims to help people who work in jobs like house help, gardeners, and delivery personnel – jobs that are not very organised. The main goal is to make sure these workers feel secure and are protected from things like accidents, illnesses, and diseases.

Additional read: SSY Scheme

Atal Pension Yojana details

Here are the key details:

  • The pension starts once the subscriber reaches 60 years of age.
  • Subscribers can choose a monthly pension ranging from Rs. 1,000 to Rs. 5,000. Their contribution amount will be calculated accordingly.
  • Contribution to the Atal Pension Yojana (APY) qualify for tax benefits under section 80CCD(1).
  • Having a bank account is a requirement for the scheme, and the deposit amount is automatically deducted from the account at regular intervals.

Eligibility criteria

Eligibility criteria for Atal Pension Yojana (APY) include:

  • The Subscriber's age must be between 18 and 40 years
  • Subscriber should have a saving account in a bank or post office savings account
  • From October 2022, citizens who have paid income tax or have a history of paying income tax are not eligible to join APY.

How to open Atal Pension Yojana account?

To open an Atal Pension Yojana (APY) account, follow these steps:

  1. All nationalised banks offer the APY scheme, and individuals interested in opening an APY account can visit their respective branches or go to the bank's website to download the form.
  2. The application form is available in multiple languages.
  3. Fill the form and submit it to respective bank branch.
  4. Submit a photocopy of your Aadhaar card when applying.

How to fill application form

To fill out an Atal Pension Yojana (APY) application form, follow these steps:

Section 1 – Include your bank information, such as bank name, bank account number, and bank branch details.

Section 2 – Fill in personal information, including your name, date of birth, email-ID, marital status, spouse's name, nominee's name, relationship with the nominee, age, and mobile number. Also, provide Aadhar Card details of your spouse (if married) and nominee.

Section 3 – State the chosen pension amount: Rs. 1,000, Rs. 2,000, Rs. 3,000, Rs. 4,000, Rs. 5,000. Based on the pension amount, the monthly investment amount will be calculated and filled in by the bank.

Additional read: Ladli Laxmi Yojana

Atal Pension Yojana penalty charges

If payments are delayed, monthly penalty charges for Atal Pension Yojana (APY) will be imposed as follows:

  • For monthly contributions up to Rs. 100, a penalty of Rs. 1 will be charged.
  • Contributions ranging from Rs. 101 to Rs. 500 will incur a penalty of Rs. 2.
  • If the monthly contribution is between Rs. 501 and Rs. 1,000, the penalty charges will be Rs. 5.
  • Contributions exceeding Rs. 1,001 will attract a penalty of Rs. 10.

What happens if you fail to contribute to APY?

  • Your account will be frozen, If no payments are made for 6 months.
  • The account will be deactivated if no payments are made for 12 months.
  • The APY account will be closed if payments are not made for 24 months.

How is APY money invested?

Here is how APY money is typically invested:

  • Government securities: 45% to 50%.
  • Term deposits of banks and debt securities: 35% to 45%.
  • Equity and equity-related instruments: 5% to 15%.
  • Asset backed securities: Up to 5%.
  • Money market instruments: Up to 5%.

Tax benefits for APY subscribers

Investors can enjoy tax benefits from Atal Pension Yojana as per Section 80CCD of the Income Tax Act. The maximum tax exemption limit is 10% of the total income, up to Rs. 1.50 lakh under Section 80CCD (1).

Additionally, an investor in APY qualifis for an extra tax exemption of Rs. 50,000 annually under Section 80CCD (1B) for contributions of Rs. 50,000 annually.

It is important to note that tax regulations may undergo periodic revisions.

While the APY offers tax advantages, remember that fixed deposits offer competitive interest rates. Bajaj Finance provides one of the highest interest rates in the market, up to 8.85% p.a. on their fixed deposits. You can consider a Bajaj Finance FD alongside your APY contributions for the potential to grow your savings faster.

Additional read: Post Office Scheme

Withdrawal procedure from APY

  1. After reaching 60 years of age, subscriber can ask the respective bank to give you the smallest guaranteed monthly pension, or possibly more, if the investments did better than what was promised in APY.
  2. If subscriber pass away after the age of 60, his spouse will receive the same pension amount. If both the subscriber and spouse passed away, the nominee will receive the entire amount.
  3. If the subscriber passes away before turning 60, his spouse can keep paying into account until the subscriber would have turned 60 and get the same pension. Or if she do not want to invest, she can claim the entire saved amount.


Atal Pension Yojana offers crucial financial protection for workers of unorganised sector. With guaranteed pensions, tax benefits, and straightforward withdrawal processes, APY aims to ensure a respectable retirement for everyone.

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Frequently asked questions

Can I withdraw money from APY?

Yes, you can withdraw money from APY once you reach the age of 60, subject to certain conditions and procedures.

What is the maturity benefit of APY?

The maturity benefit of APY includes receiving a guaranteed pension payout every month after reaching the age of 60.

How does APY pay monthly?

The pension amount is calculated based on your contributions and accumulated interest. It's directly deposited into your bank account on a monthly basis.

Is it good to invest in APY?

Investing in APY can be beneficial as it offers a secure and guaranteed pension income, helping individuals build a retirement corpus for financial stability in later years.

What is the minimum deposit in APY?

The minimum deposit varies depending on your age and chosen pension amount.

What is the maturity period of APY?

APY matures when you turn 60. From that point, you start receiving your pension.

Can anyone join APY?

To join, you must be an Indian citizen between 18-40 years old and have a savings bank account.

What happens if an APY member dies before 60?

If an APY subscriber dies before the age of 60, the accumulated pension corpus is provided to the nominee or legal heir as per the scheme's guidelines.

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As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.