Atal Pension Yojana Compare

Additional Useful Information

• The minimum amount required to open an APY account at the age of 18 is ₹42 a month. This will result in a minimum guaranteed pension of ₹1,000 monthly.

• The maximum contribution as to how much an investor can invest in this scheme at the age of 18 is ₹210 a month. This will result in a minimum guaranteed pension of ₹5,000 monthly.

• This table is from the official website of the APY Scheme can be referred to the link Atal Pension Yojana Premium Chart and Calculator [Table] - Atal Pension Yojana, to understand the different amounts needed for investment at different ages to receive a specific minimum pension amount at the age of 60.

• The government co - contributes 50% of the total yearly contribution, or ₹1,000 per year – whichever is lower. Workers who are non-income taxpayers are eligible for this co – contribution.

• APS matures when the investor turns 60 years old. Contributions can be made up to the age of 40.

• Withdrawal terms are as follows:
• Exit before the age of 60 (Premature Exit):
• The subscribers would only be given back the contributions made by them, and any income earned on the contributions up until that point. The government co – contribution will not be given to the subscribers. That amount will have to be foregone if the subscriber exits before 60.  
• However, should the reason for premature exit before the age of 60 be a terminal illness, the entire accumulated corpus is returned to the subscriber including the government contributions.
• At the age of 60:
• The subscribers will start drawing the pension benefits as per the returns generated.
• On demise before the age of 60:
• The spouse of the subscriber would have the option to continue the contribution in the APY scheme up until the time the deceased subscriber would have turned 60, and receive the same benefits, the deceased subscriber would have received at the age of 60.
• Should the first option not be exercised, the spouse/nominee would also have the option wherein the entire accumulated corpus would be returned to them.
• On demise after the age of 60:
• The pension will be received by the spouse. Should the spouse pass away/not present, the accumulated pension wealth would be given to the nominee.

• Partial Withdrawals are not permitted under the APY Scheme.

Returns *

• APY generates 8%-9% returns yearly to generate pension returns and the corpus accumulated, that will be given to the nominee on death.

• Since APY guarantees returns, they traditionally generate lesser returns as compared to the National Pension Scheme (NPS), where returns are market linked. However, NPS returns are riskier since they are market linked.

• Pension Fund Managers invest contributions in safe, debt-based instruments such as government bonds and treasury bills.

• Unlike the National Pension Scheme, subscribers do not have the choice to have their own asset allocation and freedom of investments.

Risk Level

• APY is a risk-free scheme since a minimum pension amount is guaranteed.

• Most of the investments are done in government related debt securities which are safe.

Liquidity

• Premature Exits can be done at any time. This indicates that APY is a liquid investment scheme.

• Investors can look at ‘additional useful information’ to know more about the withdrawal terms.

Interesting Facts

• There are 3 fund managers that can be selected from. Any one out of these 3 can be selected.

• Only a valid phone number and a valid savings account in a bank is needed to start this scheme.

• Generally, this scheme is used as a retirement planning option in India since the primary objective of this investment option is to pay pension to investors post retirement so that they have a source of steady income.

Tax Implications

• Any accumulated amount received is tax free.

• Pension income received is taxable and is taxed as per the income slab of the investor.

• Under section 80CCD(1) of the Income Tax Act, investors are eligible for a maximum tax deduction of ₹1,50,000. Another ₹50,000 can be deducted under section 80CCD(1B). This means, tax deductions up to ₹2,00,000 can be claimed. Contributions made towards APY can be included in these deductions.

Where To Invest

• https://www.hdfcbank.com/personal/resources/learning-centre/invest/check-how-apply-for-atal-pension-yojana-online-and-offline

• https://www.icicibank.com/personal-banking/accounts/pension-schemes/atal-pension-yojana

• https://npstrust.org.in/open-apy-account