Are you looking for a scheme that can help you secure your financial future? Do you want to ensure that you have enough money to lead a comfortable life after retirement? Look no further than the Atal Pension Yojana (APY). This government-backed pension scheme offers a range of benefits to its subscribers. In this article, we discuss the top six benefits of APY.
But before we dive into the scheme’s benefits, let’s take a moment to understand what it is. APY is a pension scheme launched by the Government of India in 2015. The scheme aims to provide a steady income stream to subscribers after retirement. Under the scheme, subscribers are required to make regular contributions towards their pension account, which is managed by the Pension Fund Regulatory and Development Authority (PFRDA).
Secure Your Retirement with These Six Benefits of APY
Now that we know what the APY is, let’s take a look at its benefits:
- Low Entry Barrier and Affordable Premium
APY has a low entry barrier, which means anyone between 18 to 40 years of age can enrol in the scheme. The premium amount is also affordable, which is based on the age and pension amount selected. The minimum monthly contribution amount is as low as Rs 42, making it an accessible option for people in the unorganised sector. It’s a great scheme for those who don’t have a regular source of income or don’t have access to other pension schemes.
The APY’s affordability and low entry barrier make it an ideal choice for people who want to start investing but don’t have much to spare. The scheme allows subscribers to start small and gradually increase their contribution amount as their income grows.
- Guaranteed Pension
One of the primary benefits of the APY scheme is that it offers a guaranteed pension to its subscribers once they retire. The pension amount ranges from Rs 1,000 to Rs 5,000 per month, depending on the contribution amount and the age at which you enrol in the scheme. The subscribers can choose the pension amount they want to receive after retirement and start contributing accordingly.
The scheme guarantees a regular source of income to the subscribers after they retire, ensuring financial security in their old age. This is especially important for those who don’t have any other retirement savings or don’t have a regular source of income. The guaranteed pension amount is fixed and doesn’t depend on market fluctuations or interest rates, making it a stable source of income.
- Tax Benefits
Contributions made towards the APY scheme are eligible for tax deductions under Section 80CCD of the Income Tax Act. This means subscribers can claim a tax deduction of up to Rs 50,000 per annum on their contribution towards this scheme, which reduces their taxable income and saves money on taxes.
The tax benefits make the APY scheme even more attractive to subscribers, as it not only ensures a regular source of income in their old age but also helps them save money on taxes. The subscribers can use the money they save on taxes to increase their contribution amount, ultimately increasing their pension amount.
- Government Co-contribution
To encourage subscribers to enrol in the APY scheme, the government provides a co-contribution of 50% of the subscriber’s contribution or Rs 1,000 per annum, whichever is lower, for five years. This co-contribution is available for subscribers who join the scheme before the age of 40 and have a minimum contribution period of 20 years.
The government’s co-contribution is a great incentive for subscribers to enrol in the scheme, as it effectively doubles their contribution amount for the first five years. This not only increases their pension amount but also helps them save more money on taxes. The co-contribution is available for subscribers who join the scheme before the age of 40 and have a minimum contribution period of 20 years, making it accessible to a wide range of people.
- Death Benefits
The APY scheme offers death benefits to the nominee in case of the subscriber’s demise. The nominee will receive the pension amount or the corpus amount, depending on the situation. The pension amount will be provided if the subscriber had opted for a pension plan, while the corpus amount will be paid if the subscriber had opted for the lump sum withdrawal plan. This ensures that the subscriber’s family members are financially secure even after they are gone.
It is crucial to note that the subscriber must mention the nominee’s name during the APY enrollment process. The nominee can be anyone from the subscriber’s family, including their spouse, children, or parents.
- Easy Enrollment
The enrollment process for the APY scheme is straightforward. You can enrol through any bank account or post office by filling out the APY registration form. You can also enrol online through the official APY website or mobile banking apps.
To enrol online, you need to have a savings account with any bank or post office, and your mobile number must be registered with your Aadhaar. After submitting the online application, the bank or post office will authenticate your details, and once verified, you will receive a confirmation message.
Once enrolled, you can easily track your contributions and APY Balance Check using the official APY website or mobile app. This feature allows subscribers to keep tabs on their investments and ensures transparency.
Final Words
The Atal Pension Yojana is an important initiative by the government of India to promote financial security in the unorganised sector. It offers a reliable pension scheme to its subscribers, making it an attractive investment option. The scheme has been designed to be accessible and affordable, and the easy enrollment process adds to its convenience. With its many features and benefits, the APY scheme is a great way for millions of Indians to secure their future and ensure a comfortable retirement.
