APY aims to help these workers save money for their old age while they are working and guarantees returns post retirement. The scheme also promises a co-contribution by Central Government of 50 per cent of the total prescribed contribution by a worker, up to Rs. 1000 per annum, but only to those who joined APY before 31.12.2015. Further, this co-contribution would be made only for 5 years, from FY 2015-16 to 2019-20 in the eligible cases subject to conditions mentioned below.
You are eligible for the Atal Pension Yojana if you are:
1. An Indian citizen
2. Have a valid bank account
What is the monthly contribution and mode of payment
APY is a periodic contribution based pension plan and promises a fixed monthly pension of Rs 1000/ Rs 2000/ Rs 3000/ Rs 4000 or Rs 5000. Your monthly contribution depends upon the fixed amount of monthly pension you want and the age when you start Contributions end and pension starts at 60 years of age. Therefore, even if you join APY at 40 years of age you need to pay premium for a minimum of 20 years to avail the pension. The following table elaborates on the monthly contributions based on your pension plan and age.
Benefits under APY
APY provides guaranteed pension of Rs 1,000 to Rs 5,000 (as explained above) to the subscribers. The scheme also allows a subscriber to decrease or increase pension amount during the course of accumulation phase, once an year.
In case of death of subscriber, the spouse of the subscriber shall be entitled for the same amount of pension till his or her death. And after the demise of both spouse and subscriber, the nominee will be entitled to receive the pension money that the subscriber had accumulated till 60 years of age.
However if the subscriber dies before 60 years, the spouse will have the choice to either exit the scheme and claim the accumulated amount or continue maintaining the account under the subscriber's name for the remaining vested years. The spouse of the subscriber shall be entitled to receive the same pension amount as the subscriber until death of the spouse in the latter case.
Also Read: You may soon be auto enrolled in Atal Pension Yojana
Restrictions on government contribution
However if you are a part of any other social security scheme and a tax payer, then you are not entitled for government contribution. For instance, members of the Social Security Schemes under the following enactments would not be eligible to receive Government co-contribution:
1. Employees' Provident Fund & Miscellaneous Provision Act, 1952.
2. The Coal Mines Provident Fund and Miscellaneous Provision Act, 1948.
3. Assam Tea Plantation Provident Fund and Miscellaneous Provision, 1955.
4. Seamens' Provident Fund Act, 1966.
5. Jammu Kashmir Employees' Provident Fund & Miscellaneous Provision Act, 1961.
6. Any other statutory social security scheme.
How to apply
Approach the bank branch/post office where your savings bank account is held or open a savings account if you don't have one and fill up the APY registration form.
If you are a net savvy user, you can get enrolled for APY through your savings account directly using internet banking and choose auto debit facility for your contributions. The premium will be debited from your age of enrolment till 60 years.
Also read: Now you can get enrolled for APY through saving bank account
While, leading banks in the country like SBI and ICICI are offering this facility through net banking, this online option is not available with all the banks and you may have to pay a visit to your bank to get enrolled.
How to apply for APY using SBI online
Login to your netbanking account. Select 'Social Security Schemes' under 'My Account' tab. A new page will appear on your screen. Click 'select scheme' dropdown and choose Atal Pension Yojana. Then select your savings account number that you want to link with the scheme and submit. As soon as you submit this page, you get an option to select the Customer Identification (CIF) number. Select the CIF generated which is system generated and submit.
After this step, an e-form will appear on your screen. Follow the instructions given on the screen. Your bank details and personal information shared with the bank during the time of opening your account will be picked automatically. However there will be a few tabs seeking additional contact information like email address, Aadhar number which was not made available to the bank while opening the account. It is not mandatory to provide Aadhaar number for opening APY account. It is however desirable to provide Aadhaar Number for proper identification of the subscriber. Below the personal details tab, you'll get the option of filing the nominee details. After filing the nominee details select the pension details; Pension amount, Contribution Periodicity which can be monthly, quarterly or half yearly and the contribution amount. Fill in all the details carefully and submit and download the acknowledgement.
You may e-subscribe for APY with a few clicks, but there's no option to unsubscribe for it online. To discontinue APY, you need to visit your bank's home branch which involves a little paperwork and can be a tiresome task.
Account Maintenance charges
Penalties for default
Deduction would be made in the subscribers account for account maintenance charges and other related charges on a periodic basis. Once the account balance in the subscriber's account becomes zero due to deduction of account maintenance charges, fees and overdue interest, the account would be closed immediately. If there's a continuous default for 6 months, you pension account will be freezed and if there's a continuous default for 12 months, the account will get closed and whatever balance is left after the above said deductions will be given to the subscriber.
For delayed contributions a penalty of Rs. 1 per month for contribution of every Rs. 100, or part thereof, for each delayed monthly contributions. Which implies:
Rs.1 per month for contribution upto Rs.100 per month.
Rs.2 per month for contribution upto Rs.101 to 500 per month.
Rs.5 per month for contribution between Rs.501 to 1000 per month.
Rs.10 per month for contribution beyond Rs.1001 per month.
Withdrawal procedure from APY
Upon completion of 60 years of age:
After attaining the age of 60 years, you need to get in touch with your respective bank or post office and submit the request for drawing the pension.
However, if in case of subscriber's death after 60 years, the same amount of monthly pension is payable to spouse (default nominee). Nominee will be eligible for return of pension wealth accumulated till age 60 of the subscriber upon death of both the subscriber and spouse.
Exit before the age of 60 Years:
As per circular dated May 2, 2016 on PFRDA website, voluntary exit in APY is generally not permitted. However in case of exceptional circumstances such as terminal illness, or death of the subscriber it can be allowed. In case a subscriber, who has availed Government co-contribution under APY, chooses to voluntarily exit APY at a future date, he shall only be refunded the contributions made by him to APY, along with the net actual accrued income earned on his contributions (after deducting the account maintenance charges). The Government co-contribution, and the accrued income earned on the Government co-contribution, shall not be returned to such subscribers.
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14 Comments on this Story
Ritender80 days ago
Can we take Atal pension yojana and old age pension.
Jyoti Durane165 days ago
If apy installment is not deducted from more than two years what will be the procedure to restart the account
Somnath DasGupta945 days ago
Why not also provide an option of lumpsum contribution of the entire premium upfront and save the headache of monthly contributions ? That would also give working capital advantage to the fund manager besides allowing him to earn higher returns. Reduces the no. of entries for scrutiny in the bank statement too.