Why do Indians focus on applying for government jobs? The primary reason is job security. But the more significant reason is the security of life after retirement. Government jobs entitle their employees to receive a monthly pension after retirement. It enables them to lead a dignified life after retirement.
The nationalized banks were also a preferred employment avenue for aspiring candidates. However, the bank jobs have also lost their charm because the new employees do not automatically get a pension after retirement.
So, what inference can we make from the above two situations? People prefer to lead a secure life after their retirement. A pension allows social security and lets them lead a respectable life. So, what is the option available for people who are not entitled to a pension from their employers? The solution is Atal Pension Yojana.
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What is Atal Pension Yojana (APY)?
The Atal Pension Yojana is a contributory pension scheme that focuses on such employees and the working class and helps them earn a steady income after their retirement.
Here is a gist of the scheme.
- Pension Amount – Up to Rs 5,000
- Age Limit – 18 to 40 years
- Contribution – Minimum of 20 years
- Exit age – 60 years
The Indian Government introduced this scheme in 2015-16 with the objective of people working in the unorganized sector.
- The maximum pension payable in the Atal Pension Yojana is Rs 5,000, depending on the individual’s contribution.
- The Indian Government co-contributes to the scheme.
- Investments made under the APY are eligible for tax benefits.
- The returns are risk-free.
Who is eligible to enroll in the Atal Pension Yojana?
- Indian citizens between 18 and 40 years can enroll in the scheme.
- The individual should have a valid bank account linked to their Aadhar card.
- An individual cannot have more than one APY account.
Contributions to the Atal Pension Yojana
Individuals enrolling in the scheme should declare the pension amount they would like. The contribution depends on their age and the amount of pension they apply for. The investment is made for a minimum of 20 years to be eligible to receive the pension. The assistance starts from the month they attain 60 years of age.
Here is the contribution table to help you understand better.
Entry Age |
No. of years of contribution |
Monthly pension Rs 1000 |
Monthly pension Rs 2000 |
Monthly Pension Rs 3000 |
Monthly Pension Rs 4000 |
Monthly Pension Rs 5000 |
Corpus Rs 1.70L |
Corpus Rs 3.40L |
Corpus Rs 5.10L |
Corpus Rs 6.80L |
Corpus Rs 8.50L |
||
18 |
42 |
42 |
84 |
126 |
168 |
210 |
19 |
41 |
46 |
92 |
138 |
183 |
228 |
20 |
40 |
50 |
100 |
150 |
198 |
248 |
21 |
39 |
54 |
108 |
162 |
215 |
269 |
22 |
38 |
59 |
117 |
177 |
234 |
292 |
23 |
37 |
64 |
127 |
192 |
254 |
318 |
24 |
36 |
70 |
139 |
208 |
277 |
346 |
25 |
35 |
76 |
151 |
226 |
301 |
376 |
26 |
34 |
82 |
164 |
246 |
327 |
409 |
27 |
33 |
90 |
178 |
268 |
356 |
446 |
28 |
32 |
97 |
194 |
292 |
388 |
485 |
29 |
31 |
106 |
212 |
318 |
423 |
529 |
30 |
30 |
116 |
231 |
347 |
462 |
577 |
31 |
29 |
126 |
252 |
379 |
504 |
630 |
32 |
28 |
138 |
276 |
414 |
551 |
689 |
33 |
27 |
151 |
302 |
453 |
602 |
752 |
34 |
26 |
165 |
330 |
495 |
659 |
824 |
35 |
25 |
181 |
362 |
543 |
722 |
902 |
36 |
24 |
198 |
396 |
594 |
792 |
990 |
37 |
23 |
218 |
436 |
654 |
870 |
1087 |
38 |
22 |
240 |
480 |
720 |
957 |
1196 |
39 |
21 |
264 |
527 |
792 |
1054 |
1318 |
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The APY Withdrawal Rules
- Individuals start getting a pension after reaching 60 years of age.
- They can withdraw from the scheme on attaining 60 years and opt to receive the complete annuitization of the pension amount.
- Withdrawal before 60 years is permitted only in the case of terminal illness or death.
Benefits of Atal Pension Yojana
- Any Indian individual can join the APY.
- Tax benefits are available under Sec 80CCD.
- The Indian Government guarantees the pension to the individual for life.
- In case of demise before 60 years, the spouse can complete the scheme’s duration or claim the contributions made by the deceased.
How does it compare to Chitty Money?
There is no comparison between the APY and chit fund. So, what is chit business? Chit funds are rotary savings-credit schemes run by registered chit fund companies that solicit regular contributions from members and allow them credit on pre-decide mutual terms as laid down in the chit fund details. The returns on investment are higher than APY. However, the APY is different because it carries a social obligation to pay the investor a fixed pre-decided sum of money.
What is Atal Pension Yojana (APY)?
The Atal Pension Yojana is a contributory pension scheme available for people who are not entitled to a pension from their employers. The Indian Government introduced this scheme in 2015-16 with the objective of people working in the unorganized sector.
How can one withdraw from the APY?
Individuals can start getting a pension after reaching 60 years of age. They can opt to receive the complete annuitization of the pension amount. Withdrawal before 60 years is permitted only in the case of terminal illness or death.
How does APY compare to Chitty Money?
There is no comparison between the APY and chit fund. So, what is chit business? Chit funds are rotary savings-credit schemes run by registered chit fund companies that solicit regular contributions from members and allow them credit on pre-decide mutual terms as laid down in the chit fund details. The returns on investment are higher than APY. To know more about Money Club an online chit fund platform click below https://moneyclubber.com/blog/chit-fund/
