Atal Pension Yojana: Facts you should be aware of

The Indian Government in 2015 launched a unique social security scheme which focuses on workers employed under the unorganised sector. The individuals consist of drivers, labourers, gardeners, domestic maids, and others who do not have the provisions of pension upon retirement. Called as Atal Pension Yojana, the program was launched for encouraging these people to invest money monthly and create a retirement corpus. The amount parked in such an account helps people to secure their economic future when they turn old and have no scope of employment.

But here are some facts about APY scheme that you should be aware of before getting into it

• Age: You can open the account when you are 18 years old, and the maximum age for making pension investment is 40 years.
• Account opening: You need to have two things in place before setting up your APY scheme – a bank account and a social ID proof such as PAN card, Aadhaar, or voter’s ID. You can open the account in any public or nationalised bank or Indian post office.
• Premiums: Subscribers can invest as little as INR 1,000, and the amount can go up to INR 5,000 in the account. You can contribute the amount monthly. The premium contributions can be increased at any given time during the investment period, merely visiting the bank branch and speaking to the official for making essential changes.
• Contributions: The minimum contribution towards Atal Pension Yojana scheme is up to 20 years. The contributions you make to the account gets directly debited from the savings account. Subscribers also need to make sure they have enough balance in their account linked to APY.
• Government contributions: For encouraging people to invest in the scheme, the Indian Government also makes some contribution to the APY account. For the accounts opened between June 2015 to December 2020, the Government either contributes to INR 1,000 or 50 per cent of the subscriber’s contribution amount, whichever is less. The Government contribution reflects on the account only after 12 months of the contribution.
• Defaulting: If the individual defaults in making monthly contributions, they need to pay the penalty for the same. They get charged INR 1 monthly for every INR 100 contributed to the scheme. Also, if someone fails to deposit their amount in the APY scheme for six months in a row, the account gets frozen. If no deposit made for 12 months straight, the account gets closed and the subscriber receives the accumulated amount.

Withdrawal: The Atal Pension Yojana scheme matures when the account holder turns 60 years. Subscribers cannot withdraw the money until maturity period. However, if the subscriber closes the account before 60 years, they receive only the contribution amount and the interest on it. They need to forgo the Government contributed amount. The only scenario under which the subscriber can withdraw funds is for terminal illness. Upon the death of the account holder, the nominee receives the entire sum.