7 facts you need to know about Atal Pension Yojana

In 2015, the Government of India launched a special pension scheme with a focus on workers in the unorganized sector that consists of individuals such as drivers, labourers, gardeners, domestic help maids and such other individuals who do not have a scope for pension upon retirement. Named the Atal Pension Yojana, this is a special social security scheme, designed to encourage such individuals to invest money every month and create a retirement corpus. The sums parked in this account can help such individuals secure their economic future when they are older and have no scope for employment. Here are 7 facts you need to know about the scheme 

Age limit: The minimum age limit to open this account is 18 years whereas the maximum age limit is 40 years. 

Account opening requirements: A basic bank account and a national identification proof document (e.g. Aadhaar card or Voter’s I.D.) are the only two requirements to set up the Atal Pension Yojana scheme account. The account can be opened in any public sector or nationalized bank or Post Office in India. 

Increasing premiums: Subscribers may invest as little as ₹1,000 up to a maximum of ₹5,000 in this pension account. The amount can be contributed on a monthly basis. They can also increase their premium amount contributions at any given time during the investment period simply by visiting their bank and speaking to an official to make the necessary changes. 

Individual Contribution: The minimum contribution period for this scheme is 20 years. Individuals need to make a contribution to this account which is directly debited from their savings account. Subscribers need to ensure that they have sufficient balances in their bank accounts linked to the Pradhan Mantri Atal Pension Yojana scheme.  

Government contribution: To encourage people to invest in this scheme, the Government of India will also make a contribution to their pension scheme account. For accounts opened between 1^st June 2015 and 31^st December 2020, the Government will make a contribution of either ₹1000 or 50% of the subscriber’s contribution amount, whichever is lesser. The government’s contribution will be reflected in the subscriber’s account only after 12 consecutive months of contribution.  

Penalty for defaulting: In case an individual defaults in making the fixed monthly contribution to the pension account, he/she needs to pay a penalty for defaulting. Such individuals will be charged a penalty of ₹1 per month for every ₹100 contributed to the pension scheme. Also, if one fails to deposit sums in this account for 6 months in a row, the account will be frozen. If no deposits are made for a period of 12 consecutive months, the account will be automatically closed and the subscriber will receive the accumulated amount. 

Clause for withdrawal: The APY account matures when the account holder turns 60 years of age. Subscribers may not withdraw the amount from the account until the maturity period in order to gain the benefits. However, if the subscriber closes the account before 60 years of age, he will receive only his contribution amount and interest earned on it. He will have to forego the Government contribution amount. The only circumstance in which sums can be withdrawn is terminal illness. In case of the death of the subscriber, his/her nominee will receive the entire contribution amount.

So, if you have employed the services of any member belonging to the unorganized sector, it is your civic responsibility to inform them about the APY scheme and encourage them to open this account.