The Atal Pension Yojana is a scheme backed by the government that offers financial security post-retirement, mainly catering to unorganized sector workers. This is an income security scheme for workers aged 18-40 years who are not paying any income tax.

This scheme motivates the workers to save voluntarily for the time period post-retirement, hence taking care of any longevity risks towards the employees of the unorganized sector.

To ensure the correct pension amount & contribution is chosen, one can use a Retirement Calculator, which will help to plan the future finances.

Features of Atal Pension Yojana

Provided are the features of Atal Pension Yojana:

  • Minimum Guaranteed Pension

This scheme provides a minimum pension amount of INR 1000 per month which may vary according to the subscriber’s contribution.

  • Aadhaar not mandatory

To enroll under this scheme, an aadhar card is not mandatory.

  • NRI Eligibility

NRIs falling under the age group of 18-40 years & having a bank account in a POP branch can also apply for this scheme.

  • Nomination Facility

This scheme entitles the subscriber to appoint a nominee who will receive the pension amount in his/ her absence.

  • Procedure for Opening APY Account

The subscriber is required to visit the bank where his savings account is maintained to get the APY account opened.

  • Retirement Benefits

This scheme offers a minimum guaranteed payout to the subscribers and, thereafter a minimum guaranteed pension amount to the spouse. Lastly, the refund of accumulated wealth to the nominee once the age of 60 is attained.

  • Contribution Amount

The contribution amount depends upon multiple factors, such as frequency of contribution, age of subscriber, pension slab, etc.

  • Change of Pension & Contribution Frequency

It also provides an option to change the pension amount & auto-debit mode facility.

  • Wealth Details

The amount payable to the nominee will depend upon the pension amount that has been decided, which can be a maximum of up to INR 8,50,000 against the monthly pension of INR 5000.

Benefits of Atal Pension Yojana

Provided are the benefits of Atal Pension Yojana:

  • Upon exit on attaining the age of 60 years

Once the age of 60 years is attained, the subscriber will receive the mentioned benefits:

  • Guaranteed minimum pension amount: 

Once the age of 60 years is attained, every subscriber will start receiving a guaranteed minimum pension amount of INR 1000 p.m. or INR 2000 p.m. INR 3000 p.m. or INR 4000 p.m. or INR 5000 p.m.

  • Guaranteed minimum pension amount to the spouse: 

After the subscriber’s demise, his/ her spouse will start receiving the pension amount until their death, making it a strong contender in the list of Best Retirement Plan in India.

  • Return of the pension wealth to the nominee of the subscriber:

If the subscriber & spouse both die, the nominee will start receiving the pension till the subscriber’s age is 60 years.

  • Voluntary Exit, i.e. before attaining 60 years of age

The contributions made by the subscriber towards Atal Pension Yojana can be applied for a refund along with the net actual accrued income on the contributions made by him. This is subject to the deduction of account maintenance charges. In the case of subscribers who joined APY before 31st March 2016, they will not be entitled to receive this amount.

  • In case of death before 60 years 

Option I: If the subscriber dies before the age of 60 years, his/ her spouse still has the option to contribute to the APY account. This means the spouse can get the account maintained under his/ her name for the leftover vesting period, i.e. till the actual subscriber has attained the age of 60 years.

After this, the spouse will start receiving the same pension amount as that of the actual subscriber until his/ her death. This account & pension amount is over & above anything the nominee himself/ herself receives in their own name.

Option II: The complete corpus amount, i.e., the accumulated pension amount as of the date under this scheme, will be refunded back to the spouse or his/ her nominees.

Eligibility Criteria

Provided are the eligibility parameters that are to be met to buy an Atal Pension Plan:

  • The minimum age required to opt for APY is 18 years.
  • The maximum age to join APY is 40 years.
  • The age required to exit the plan & start receiving a pension is 60 years.
  • The amount to be contributed by the subscriber should be auto-debited from his/ her savings account on a monthly, quarterly, or semi-annual basis.
  • The contribution is to be started from the date of joining the scheme till the subscriber attains the age of 60 years.

Note: From 1st Oct, 2022, any income tax payer, shall not be eligible to opt for Atal Pension Yojana.

Steps to Apply for APY

Provided are the different methods available to apply for APY:

Online

  • Process I:
  • Log in to the Internet banking facility to open an APY account & look for the option “Dashboard”.
  • Fill out the basic details along with the nominee details.
  • Tick on the auto-debit facility & submit it.
  • Process II:
  • Visit the website “eNPS”.
  • Click the option APY Registration & fill out the basic details of the form to complete KYC.
  • Decide the amount of pension, frequency of contribution to be made, etc.
  • Fill out the nominee details after which you will be redirected to the NSDL website.
  • After signing digitally & verifying using OTP, the registration is complete.

Offline

Visit the bank’s branch where the subscriber maintains his/ her savings bank account to submit the application form.

Conclusion

The Atal Pension Yojana is a trustworthy & reasonable retirement plan that offers financial security to workers working in an unorganized sector. This plan offers guaranteed payouts & is backed by the government, making this plan a smarter choice. This plan is a wise & smart choice to ensure long-term financial safety.