No matter what kind of job you’re in, everybody needs financial security to enjoy the retirement years of their lives. If a person is in government service, then there’s no need to worry, as financial security provided by the government can minimize the mental burden to a great extent. Unfortunately, individuals working in the private and unorganized sectors do not enjoy the same relief. Keeping this in mind, the government of India introduced the “Atal Pension Yojana” to extend financial security to every citizen.
Launched in the fiscal year 2015-2016, the Atal Pension Yojana (APY) is designed specifically for those employed in the unorganised sector. The scheme aims to provide these individuals with a reliable source of income during their retirement years, ensuring a more stable and worry-free future. Remember that the APY is regulated and managed by the Pension Funds Regulatory & Development Authority (PFRDA), which ensures it operates smoothly and effectively to serve its intended purpose.
In this post, we’ll discuss everything you need to know about APY in detail!
What is Atal Pension Yojana?
The Atal Pension Yojana (APY) is a program launched by the government of India to provide a reliable pension system for workers in the private or unorganized sector. Managed by the Pension Funds Regulatory & Development Authority (PFRDA) under the Ministry of Finance, this scheme is designed to offer financial security for those who don’t have it or who cannot afford to pay hefty monthly amounts.
With the Atal Pension Yojana, subscribers can receive a guaranteed monthly pension ranging from Rs. 1000 to Rs. 5000, depending on their contributions and at the age which they join. This scheme ensures that, by the time they reach 60, all Indians have a sorted income which can support them in their difficult times. If you and your wife have a bank account, you both can open and choose a Rs. 5000 option of pension, so you both can receive Rs. 10000 every month, which would help cater to your basic household needs.
Atal Pension Yojana Eligibility
Let’s take a look at the eligibility criteria to understand whether you are eligible for the scheme or not.
- The candidate should be between 18 to 40 years of age.
- The individual should have a savings bank account.
- An Aadhar Card is mandatory. If someone doesn’t have one, they would need to submit the details later.
- The individual should not be covered under any other statutory social security scheme.
Objectives of Atal Pension Yojana
Here is a list of the objectives of Atal Pension Yojana.
- Provide Financial Protection in Pension Form
The scheme aims to protect Indian citizens from financial burdens so they can have comfortable lives even if they do not receive a pension from their office.
- Focus on the unorganized Sector
APY is designed to address the needs of workers in the unorganized sector who often lack access to structured pension plans.
- Pension Plans
People who enrol in APY will receive regular payouts in the form of monthly pensions from their accumulated funds. In the event of the beneficiary’s death, the spouse will continue to receive these payments. If both the beneficiary and their spouse pass away, a lumpsum amount will be provided to the nominee.
Features & Benefits of Atal Pension Yojana
Listed below are the salient features and benefits of Atal Pension Yojana.
- Guaranteed Pension
One of the major benefits of choosing the scheme is that it provides a reliable source of retirement income with monthly pension amounts ranging from Rs. 1000 to Rs. 5000. Remember that the exact amount you receive depends on your age and how much you contribute which ensures you have a steady income during retirement.
- Wide Coverage
Another major highlight of the scheme is that it is not only designed for the private sector but for everybody who doesn’t have a stable source of income and pension. With such kind of wider coverage, it would ultimately help more people from the scheme.
- Transferability & Nomination
One of the major features and benefits of the scheme is that it enables you to transfer your pension amount from one bank or post office to another without any difficulty. Furthermore, you can make your spouse nominee to receive the pension if you pass away, which ensures your family remains financially secure.
- Automatic Debit
Another major highlight of the Atal Pension Yojana is its automatic debit feature, which means your monthly contributions are deducted directly from your bank account. This feature helps you save time and gives you peace of mind that you’re investing in a government-backed pension plan.
- Flexibility to Increase Contributions
Last but not least, if you have earlier opted for Rs. 1000 or Rs. 2000 pension and now your financial game is strong and wants to increase it to up to Rs. 5000, you will have the flexibility to do so without running into difficulty. When you do so, you can easily secure a higher pension amount in the future which would help you build a more comfortable retirement fund.
How to apply for the Atal Pension Yojana?
If you are planning to enroll in Atal Pension Yojana, here is a list of the steps you should follow.
- In the first step, you will need to visit the branch of your bank where you have a savings bank account.
- Ask the customer representative at the counter about the APY form. Ensure you fill in the form and choose the correct salutation by ticking the right box: ‘Shri’ for males, ‘Smt.’ for married females, or ‘Kumari’ for unmarried females. If you’re married, include your spouse’s name.
- After that, you will need to enter your full name, date of birth, age, mobile number, email address, and Aadhar number.
- Choose a nominee and specify their relationship to you. Then, you will need to choose the amount you want to contribute each month for different pension options, including Rs. 1,000, Rs. 2,000, Rs. 3,000, Rs. 4000, or Rs. 5000).
- After that, you will need to fill in the date and place on the form. Ensure you sign the document or provide a thumb impression to confirm that you meet the eligibility criteria.
- Then, in the final step, the bank will process your application and open your APY account. You will get a message on your registered mobile number.
What are the penalties for late payments?
No matter what kind of reason it is, banks don’t care. If you, however, missed any payment, then here is a list of penalties for late payments based on the amount option.
- For Contributions up to Rs. 100 per month
You may be charged with a Rs. 1 penalty.
- For Contributions Between Rs. 101 and Rs. 500 Per month
The individual will be charged with a penalty of Rs. 2.
- For Contributions Between Rs. 501 and Rs. 1000 per month
There is a penalty of Rs. 5 will be imposed.
- For Contributions of more than Rs. 1000 per month
A penalty of Rs. 10 will be charged.
Conclusion
So, there you have it! That’s a wrap to everything you need to know about Atal Pension Yojana (APY). It is no secret that it is important to plan for retirement to achieve financial independence in the future. The APY provides a valuable opportunity for those in the unorganized sector to create a retirement fund and secure a steady income for their golden years of retirement. With such flexible options and decent payouts, APY is an ideal option to consider.
Frequently Asked Questions
Listed below are the frequently asked questions related to the Atal Pension Yojana.
A person can only have one APY account in his or her name.
No, an individual should have a dedicated savings bank account to enrol himself or herself in an APY account.
Though you can open your APY account without an Aadhar number, you will need Aadhar details for beneficiaries, spouses, and nominees.
Yes, EPF members can also become a part of the APY.
Yes, it is necessary to specify the nominee details when joining the APY account.
