Earn Rs 5,000 Pension Per Month: Know Eligibility & Benefits Of Atal Pension Yojana; How To Open APY Account?

There is a host of pension schemes offered by the government, which offer guaranteed benefits on a monthly basis. These schemes are risk-free, eliminating the threat of market volatility, which is highly sentiment-driven. One of them is Atal Pension Yojana, which offers the opportunity to earn Rs 5,000 pension per month.

What Is Atal Pension Yojana:

Atal Pension Yojana is focused on all citizens in the unorganised sector, catering to the needs of old age, offering income security mainly to the poor working-class citizens. The scheme is focused on motivating these citizens to save for their retirement.

Launched in 2015-16, Atal Pension Yojana is backed by the Pension Fund Regulatory and Development Authority (PFRDA) through the NPS architecture.

Benefits Of Atal Pension Yojana:

As per the government's guidelines, under APY, there is a guaranteed minimum monthly pension for the subscribers ranging between Rs. 1000 and Rs. 5000 per month. The benefit of a minimum pension is guaranteed by the government.

All bank account holders may join APY.

According to the government's website, the benefit of minimum pension under Atal Pension Yojana would be guaranteed by the Government in the sense that if the actual realized returns on the pension contributions are less than the assumed returns for minimum guaranteed pension, over the period of contribution, such shortfall shall be funded by the Government. On the other hand, if the actual returns on the pension contributions are higher than the assumed returns for minimum guaranteed pension, over the period of contribution, such excess shall be credited to the subscriber's account, resulting in enhanced scheme benefits to the subscribers.

Also, currently, a subscriber under the National Pension System (NPS) is eligible to get tax benefit for the contribution, up to a ceiling, and even for the investment returns on such contributions. Further, the purchase price of the annuity on exit from NPS is also not taxed and only the pension income of the subscribers are considered to be part of normal income and taxed at the appropriate marginal rate of tax, applicable to the subscriber. Similar tax treatment is applicable to the subscribers of APY.

Atal Pension Yojana Eligibility:

APY is applicable to all citizens of India between the ages group of 18-40 years.

Aadhaar will be the primary KYC. Aadhar and mobile numbers are recommended to be obtained from subscribers for the ease of operation of the scheme. If not available at the time of registration, Aadhar details may also be submitted later stage.

Atal Pension Yojana Withdrawal Procedure:

There are four methods to exit the APY scheme, as per the government's FAQs. These are:

1. On attaining 60 Years Of Age :- Upon completion of 60 years, the subscribers will submit the request to the associated bank for drawing the guaranteed minimum monthly pension or higher monthly pension, if investment returns are higher than the guaranteed returns embedded in APY. The same amount of monthly pension is payable to spouse (default nominee) upon death of subscriber. Nominee will be eligible for return of pension wealth accumulated till age 60 of the subscriber upon death of both the subscriber and spouse.

2. In case of death of the subscriber due to any cause after the age of 60 :- In case of death of subscriber, same pension would be available to the spouse and on the death of both of them (subscriber and spouse), the pension wealth accumulated till age 60 of the subscriber would be returned to the nominee.

3. Exit before the age of 60 :- In case a subscriber, who has availed Government co-contribution under APY, chooses to voluntarily exit APY at a future date, he shall only be refunded the contributions made by him to APY, along with the net actual accrued income earned on his contributions (after deducting the account maintenance charges). The Government co-contribution, and the accrued income earned on the Government co-contribution, shall not be returned to such subscribers.

4. Death of subscriber before age of 60 :- In case of death of the subscriber before 60 years, option will be available to the spouse of the subscriber to continue contribution in the APY account of the subscriber, which can be maintained in the spouse's name, for the remaining vesting period, till the original subscriber would have attained the age of 60 years. The spouse of the subscriber shall be entitled to receive the same pension amount as the subscriber until death of the spouse.

Or, the entire accumulated corpus under APY will be returned to the spouse/nominee.

How To Open APY Account?

Step 1: Approach the bank branch/post office where individual's savings bank account is held or open a savings account if the subscriber doesn't have one.

Step 2: Provide the Bank A/c number/Post office savings bank account number and, with the help of the Bank staff, fill out the APY registration form.

Step 3: Provide Aadhaar/Mobile Number. This is not mandatory, but may be provided to facilitate communication regarding the contribution.

Step 4: Ensure to maintain the required balance in the savings bank account/post office savings bank account for transfer of monthly/quarterly/half yearly contribution.