10 Lesser Known Facts About Atal Pension Yojana

Atal Pension Yojana, an Indian Government-backed pension plan for the unorganized sectors of the society is regulated by Pension Fund Regulatory and Development Authority (PFRDA). The main purpose of launching this scheme is for the income security of underprivileged senior citizens of the country.

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Launched on 9th June 2015, the Atal Pension Yojana scheme focuses mainly on the unorganized sectors of our society like household helpers, gardeners, delivery boys, etc. the main motive behind launching this scheme is that no citizen of India ever worries about accidents, illness, ailments in old age, etc. and have a financially secure future.

In this article, we will discuss some facts about Atal Pension Yojana that will be beneficial for you. So, let us dig in more to know some important facts about the scheme.

  1. Eligibility Required

    Employers can apply for Atal Pension Yojana in the age range of 18-40. Only 1 account is eligible per person. To open an APY Account, an individual needs to have a savings account either in a bank or post office.

  2. Contribution Frequency

    During the initial launch years of Atal Pension Yojana, the only option to pay APY contribution was on monthly basis. Now the options have increased to quarterly and half-yearly basis in addition to monthly basis.

  3. Fixed Monthly Options

    Monthly pension alternatives are fixed under Atal Pension Yojana. They are 1000/- rupees, 2000/- rupees, 3000/- rupees, and 4000/- rupees respectively.

  4. Tax Benefits

    Avail the benefit within Section 80CCD for the contributions made to the Atal Pension Yojana

  5. Deposit Amount

    The amount selected to be deposited in Atal Pension Yojana Account can be as low as 42 rupees and up to 1,454 rupees. The amount chosen is withheld on a monthly, quarterly, or half-yearly basis from the subscriber’s account.

  6. Guaranteed Pension

    Guaranteed pension is a fixed amount that the policyholder is assured to receive from the age of 60. The returns generated by the government may vary from time to time. If the accumulated corpus based on contribution is lower than the estimated returns, the central government funds such inadequacy. Also, if the accumulations are higher than the assumed returns for minimum guaranteed pension, the excess is passed to the policyholder.

  7. Discontinuation

    As per the rules, the account will not be discontinued and closed till the account balance with self-contributions minus the Government co-contributions, if there is any, becomes zero due to deduction of account maintenance charges.

  8. Penalty

    There is no such heavy penalty if one makes delayed payments in Atal Pension Yojana Account. A penalty of Rs 1 each month for the contribution of each Rs 100 or the part thereof. In case of default, one needs to regularize their overdue amount along with the penalty amount. Once regularized, the pension becomes guaranteed under the scheme.

  9. Premature Exit

    Initially, premature exit from Atal Pension Yojana Scheme was not allowed except in case of death or any terminal disease of the policyholder. Now, the rules have changed and one can voluntarily exit from APY, subject to the following conditions:

    • Contribution along with net actual interest earned on the contribution will be made after deducting the account maintenance charges
    • If any co-contribution is to be made by the government, it will not be returned along with interest earned on the contribution
  10. Premature Death

    In case of premature death, that is before the age of 60, the spouse has the option to continue Atal Pension Yojana for the remaining vesting period. The remaining period is calculated based on the age of the original policyholder. In case of the death of both policyholder and spouse, the pension corpus would be returned to the nominee.

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Eligibility Criteria For Atal Pension Yojana

To avail the advantages of the APY scheme, the following key requirements need to be fulfilled:

  • An Indian citizen must fall under the age bracket of 18 years to 40 years
  • The contributions made should be for a minimum of 20 years
  • The bank account needs to be linked with the Aadhar Card
  • The mobile number should be valid

Anyone availing the advantage of Swavalamban Yojana will be registered automatically to the Atal Pension Yojana.

How to Apply For the Atal Pension Yojana?

To avail of the benefits of the APY, follow the steps mentioned below:

  • All national banks offer APY Scheme. Anyone interested can visit the bank and begin with the Atal Pension Yojana
  • Forms are available both online and offline. For offline, visit the official website and download the form
  • The Atal Pension Yojana forms are available in Hindi, English, Marathi, Bangla, Kannada, Odia, Gujarati, Telugu, and Tamil
  • In case the bank doesn’t have a valid contact number, make sure that the number is valid.
  • Submit the photocopy of the Aadhar card.

Confirmation will be sent as soon as the application is approved.

Understanding the Monthly Contributions

The monthly contributions are on the premise of the sum of pension that one wishes to receive upon retirement and also at the age when one initiates contributing. See the table below to understand the scheme:

Entry Age

Contribution Years

Monthly Pension of Rs 5000 Indicative Return of the Corpus of Rs 8.5 lakh

Monthly Pension of Rs 5000 Indicative Return of the Corpus of Rs 6.8 lakh

Monthly Pension of Rs 5000 Indicative Return of the Corpus of Rs 5.1 lakh

Monthly Pension of Rs 5000 Indicative Return of the Corpus of Rs 3.4 lakh

Monthly Pension of Rs 5000 Indicative Return of the Corpus of Rs 1.7 lakh

18 years

42

210

168

126

84

42

19 years

41

228

183

138

92

46

20 years

40

248

198

150

100

50

21 years

39

269

215

162

108

54

22 years

38

292

234

177

117

59

23 years

37

318

254

192

127

64

24 years

36

346

277

208

139

70

25 years

35

376

301

226

151

76

26 years

34

409

327

246

164

82

27 years

33

446

356

268

178

90

28 years

32

485

388

292

194

97

29 years

31

529

423

318

212

106

30 years

30

577

462

347

231

116

31 years

29

630

504

379

252

126

32 years

28

689

551

414

276

138

33 years

27

752

602

453

302

151

34 years

26

824

659

495

330

165

35 years

25

902

722

543

362

181

36 years

24

990

792

594

396

198

37 years

23

1087

870

654

436

218

38 years

22

1196

957

720

480

240

39 years

21

1318

1054

792

528

264

40 years

20

1454

1164

873

582

291

Wrapping Up

Earlier people thought that only rich people can afford a policy or scheme. The Atal Pension Yojana scheme is an attempt to provide financial protection to the working class of the lower unorganized sector. Helpful for people in their old age, this scheme gives a decent financial back-up and creates a safe retirement nest.

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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

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