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‘Atal Pension Yojana’ (APY), run by the Government of India and the Pension Fund Regulatory and Development Authority (PFRDA), was launched with the aim of providing a fixed and guaranteed social security in old age to the citizens of the unorganized sector and low income group of the country. To join this scheme, the Government of India has fixed the minimum age at 18 years and maximum age at 40 years. This means that 40th year is the deadline to join this scheme. No citizen can open a new account in this scheme after completing the age of 40 years. If you are 40 years old and want to get a maximum pension of ₹ 5,000 every month after the age of 60, then it is important to understand the complete financial structure of how much amount you will have to deposit every month for the next 20 years and what security it will provide to your family.
Monthly contribution to Atal Pension Yojana depends on what age you have entered and how many years are left to complete 60 years. By opening an account at the age of 40, you have to make regular contributions for full 20 years (240 months).
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Monthly Installment: A 40 year old person is required to get a pension of ₹ 5,000 per month (₹ 60,000 annually) for life after the age of 60. ₹1,454 every month Have to deposit.
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Quarterly or Half Yearly Option: If you choose payment on quarterly basis instead of every month, every 3 months ₹4,326 And every 6 months on half yearly option ₹8,556 Your bank account will be auto-debited.
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Total investment in 20 years: At ₹1,454 per month, the total investment amount in your pocket in 20 years (240 months) is approx. ₹3,48,960 (Approximately ₹ 3.49 lakh).
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What will you get after 60: As soon as you complete 60 years of age, you will start getting a fixed pension of ₹ 5,000 every month for the rest of your life. In just 6 years (₹60,000 $\times$ 6 = ₹3.60 lakh) the entire principal amount deposited by you through your pension is returned, and after that, this pension will continue continuously as long as you live.
If a person is unable to contribute ₹1,454 per month, he can also choose a smaller pension slab as per his capacity. The monthly premium for different pension slabs at the age of 40 is determined as follows:
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For ₹1,000 monthly pension: every month only ₹291 Have to deposit (Nominee will get a corpus of ₹1.7 lakh).
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For ₹2,000 monthly pension: every month ₹582 Have to contribute Rs. (Nominee Corpus Rs. 3.4 Lakh).
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For ₹3,000 monthly pension: every month ₹873 Installment of Rs. 5.1 lakh will be deducted (nominee corpus Rs. 5.1 lakh).
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For ₹4,000 monthly pension: every month ₹1,164 Have to deposit (nominee corpus ₹6.8 lakh).
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For ₹5,000 monthly pension: every month ₹1,454 The contribution will be Rs. (Nominee corpus Rs. 8.5 lakh).
The biggest feature of Atal Pension Yojana is its three-tier security model, which is not usually seen in private pension schemes:
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Pension to account holder: As long as you are alive after the completion of 60 years of age, you will continue to receive ₹5,000 directly into your bank account every month.
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Lifetime pension to spouse: If the account holder dies after 60 years, the entire pension of ₹ 5,000 will continue to be received by his spouse for the rest of his life without any deduction. For this, the spouse does not have to pay any separate formality or money.
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Lump sum corpus of ₹8.5 lakh to the nominee: If both the account holder and his/her spouse die, the pension will stop and the entire accumulated fund prescribed by the government—which is ₹5,000 for the pension slab—will be withdrawn. ₹8,50,000 (eight and a half lakh rupees) It is certain—it will be transferred in lump sum to the bank account of the legal heir or nominee.
Before joining Atal Pension Yojana, it is mandatory to know about its new rules:
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Ban on income taxpayers: As per the Central Government rules (which are applicable from October 1, 2022), if you fall under the income tax bracket or file ITR, you cannot open an Atal Pension Yojana account. Even if a taxpayer opens an account by giving wrong information, his account will later be closed and only his deposited money will be returned.
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Bank Account and Aadhaar Linkage: The applicant should have an active savings account in any government or private bank or post office and it is mandatory to have Aadhaar and mobile number linked in it.
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Auto-Debit Facility: In this scheme, money does not have to be deposited by hand. ₹1,454 is automatically deducted from your savings account on the scheduled date every month. Therefore, it is important to maintain sufficient balance in the account, otherwise a nominal monthly late fee of ₹1 to ₹10 may be charged.
Opening an account of Atal Pension Yojana is very easy. If you use net banking or mobile app (like YONO SBI) of any bank like SBI, PNB, Bank of Baroda, Canara Bank or Indian Bank, then you can go to ‘Social Security Schemes’ or ‘Services’ section and select ‘Atal Pension Yojana’. Enter your date of birth there, select pension slab ₹5,000, ‘Monthly’ option for auto-debit and make your spouse a nominee and submit. Your PRAN number will be generated immediately. Those who do not do online banking can get their APY account activated on the same day by visiting their bank branch, filling a simple form and giving a copy of Aadhaar card. This step taken before crossing the age of 40 is the safest means of making you financially independent after 60.