In the current competitive era, everyone is in a rush to earn more and secure their future. And some are forgetting their future due to reckless spending. In this relentless rush, when have you thought about old age security? What will you do if you don’t have a job then? For this, the Government of India has come up with a scheme called Atal Pension Yojana which will give you financial security in your old age. You can make your own pension arrangement monthly after the age of 60 through Atal Pension Yojana.
What is Atal Pension Yojana?
Atal Pension Yojana is central government pension scheme. Under Atal Pension Yojana, you can get a monthly pension of ₹1000 to ₹5000 after reaching the age of 60.
Income tax payers cannot open an Atal Pension Yojana account. Under the official rules issued by the Ministry of Finance, anyone who is or has been an income taxpayer is strictly barred from opening a new Atal Pension Yojana (APY) account, effective from 1 October 2022
- Investment has to be made for 20 years.
- People between the ages of 18 and 40 can invest in Atal Pension Yojana.
- A person who joins this scheme at the age of 40 will have to invest till the age of 60.
How Much Pension do you Get?
Your monthly contribution is determined based on how much pension you want after retirement. If you join the scheme at the age of 18, you will have to contribute around Rs 42 to Rs 210 per month for a monthly pension of Rs 1,000 to Rs 5,000. Similarly, if you join the scheme at the age of 40, the monthly contribution can be around Rs 291 to Rs 1,454. The more you contribute, the more pension you will get after retirement. You can pay monthly, quarterly or every 6 months. Investors can contribute to this scheme on a monthly, quarterly or half-yearly basis as per their convenience. The specified amount is deducted from the bank account through auto-debit and deposited in the pension account.
What will Happen After the Death of Subscriber?
One of the special feature of the Atal Pension Yojana is its family protection facility. After the death of the subscriber, his spouse will get the same pension. After the death of both the subscriber and his spouse, the deposited amount is returned to the nominee as per the rules. If the subscriber dies before the age of 60 years, then his spouse can continue to contribute to the Atal Account. In that case, the spouse will get the same pension as per the prescribed rules. If the spouse wants, he can withdraw the deposited amount without discontinuing the scheme.
Death After Age 60 (During Pension Phase)
- Spouse Benefit: The surviving spouse receives the exact same monthly pension amount for the rest of their life.
- Nominee Benefit: After the death of both the subscriber and the spouse, the deposited amount is returned to the nominee as per the rules.
Death Before Age 60 (Premature Death)
- Option for Spouse to Continue: The spouse can choose to keep the APY account active. They continue to contribute for the remaining period until the original subscriber would have turned 60. The spouse then starts receiving the regular monthly pension.
- Complete Withdrawal: If the spouse or the nominee wants, he can close the account immediately and withdraw the deposited amount.
Where to Open an Atal Pension Account?
To open Atal Pension account you can visit your bank branch to open an account under this scheme. Many banks also provide the facility of opening an Atal Pension Account online. Apart from this, investments can also be made in this scheme through post offices.
Atal Pension Yojana provides an opportunity to deposit small amounts regularly from a young age and get a fixed monthly pension after retirement. However, it is important to check the current government rules and contribution amount before investing.
Frequently Asked Questions?
Question 1: Can an Atal account be opened without a savings account?
Answer: No. A savings bank account is required for Atal Pension Yojana.
Question 2: How is the monthly contribution date determined?
Answer: The date of the next contribution is determined based on the date on which the first contribution is made.
Question 3: Is it necessary to keep a nominee?
Answer: Yes.Nominee is required in the APY account.
Question 4: How many Atal accounts can an individual open?
Answer: An individual can open only one Atal account.
Question 5: What happens if there is not sufficient balance in the account on the date of joining?
Answer: If the specified contribution amount is not reached, a penalty or late fee may be imposed as per the rules.
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