In this article I will talk about the benefits of Atal Pension Yojana.
Atal Pension Yojana (APY) is a pension scheme launched by government of India. Depending on how much a person contributes during 18 to 40 years of age, at the age of 60, he will receive a sum Rs 1000, Rs 2000, Rs 3000, Rs 4000, or Rs 5000 monthly.
I have previously given a review of Atal Pension Yojana Scheme. I have discussed separately the various features of Features of Atal Pension Yojana. In this article, I will therefore focus on the benefits of Atal Pension Yojana Scheme.
1. Benefits of Atal Pension Yojana – Monthly Pension after 60
A person has to contribute a fixed amount every month till the time he is 60 year old. Based on the amount contributed he will receive a sum Rs 1000, Rs 2000, Rs 3000, Rs 4000, or Rs 5000 monthly.
The level of contribution would be low if a subscriber joins early and high if a subscriber joins late.
2. Benefits of Atal Pension Yojana – Unorganized Sector
India has a vast unorganized sector which has limited access to mainstream financial institutions. 88% of our working population belongs to this unorganized sector, and most people do not have any form of old age social security.
The Atal pension Yojana plans to address that by providing monthly pension for subscribers from this sector once they cross 60.
3. Benefits of Atal Pension Yojana – Government Contribtion
The Central Government will also contribute the lower of 50% of total contribution or Rs 1000 per annum to eligible subscribers for a period of 5 years from 2015-16 to 2019-20 after which the scheme may continue but will not receive any Central contribution.
This will be applicable to only those who are not income tax payers and are not covered under any social security scheme.
4. Benefits of Atal Pension Yojana – Migration of Swavalambhan Scheme to APY
Swavalambhan Scheme was a pension scheme launched in 2011 but did not receive a very good response. Existing Swavalambhan Customers between the age of 18 and 24 will be automatically migrated to APY. Swavalambhan customers beyond tha age of 40 who do not wish to continue may opt out of the scheme by complete withdrawl of the amount in lump sum.
5. Benefits of Atal Pension Yojana – Information Alerts to Subscribers
SMS Alerts will be sent periodically to subscribers informing them of account balance, contribution detail and any other relevant update.
That’s it. Thank you for reading benefits of Atal Pension Yojana.
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A Few Last Words
Before making any investment decision, please contact your financial adviser. I have provided this article for educational purpose only.
I hope you found this article on Benefits of Atal Pension Yojana useful. If you have something to add please leave a comment in the post. Please feel free to contact me.