Atal Pension Yojana – What is it, and how does it work?

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.

With Money Club You Can Earn Around 10-20% Return On Your Investment

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

Save Or Borrow Money With India’s 1st Digital Chit Fund Platform

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

Benefits of Atal Pension Yojana

  1. Any Indian individual can join the APY.
  2. Tax benefits are available under Sec 80CCD.
  3. The Indian Government guarantees the pension to the individual for life.
  4. 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.

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.

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.

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/

Get Funds In Times Of Crisis

The Smartest Saving

and Borrowing Tool