Atal Pension Yojana (APY)

Atal Pension Yojana is a pension scheme introduced by the Government of India in 2015–16, to provide pension benefits to individuals in the unorganised sector(organised sector as well get this option).

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  • The bank account of a beneficiary is linked with his/her pension accounts and the monthly contributions are directly debited.  To avoid penalties the beneficiaries have to keep sufficient balance.
  • The pension amount is based on the contributions by the person reaching the age of 60. A larger amount too can be contributed in order to receive higher pension. The corpus can be increased or decreased once a year. Beneficiaries of the scheme can choose to receive a periodic pension of Rs. 1000, Rs. 2000, Rs. 3000, Rs. 4000, or Rs. 5000, depending on their monthly contributions.
  • Individuals who are above 18 years and below 40 years of age can decide to invest. Contributions shall be made for at least 20 years.
  • A beneficiary attaining the age of 60, shall be eligible to annuitise the entire corpus amount and receive monthly pensions thereby closing the account. Before reaching the age of 60 the scheme can be if exited under circumstances like terminal illness or death. They shall be refunded their cumulative contributions and interest on it.

If a beneficiary dies before reaching 60 years of age, his/her spouse shall receive a pension. The spouse can either exit the scheme with the corpus or receive pension benefits.

Penalty in case of delay

  • Re. 1 for monthly contributions of up to Rs. 100.
  • Rs. 2 for monthly contributions within Rs. 101 and Rs. 500.
  • Rs.5 for monthly contributions within Rs. 501 and Rs. 1000.
  • Rs.10 for monthly contributions of Rs. 1001 and above.

Continuous default in payment for 6 consecutive months results in the account getting frozen and if it continues for 12 consecutive months it shall be deactivated The amount thus accumulated along with interest would be returned.

The maximum exemption allowed is 10% of the concerned individual’s gross total income up to a limit of Rs. 1,50,000. Additional exemption of Rs. 50,000 for contributions is also allowed. 


  1. A steady source of income for beneficiaries reaching 60 years
  2. Backed by the Indian government and regulated by Pension Funds Regulatory Authority of India (PFRDA). 
  3. Launched to alleviate the financial worries of individuals who are employed in the unorganised sector
  4. In case of a beneficiary’s death, his/her spouse becomes entitled to the benefits. By terminating their account they can avail the entire corpus in a lump sum or choose to receive the same pension amount as the original beneficiary. If the beneficiary and his/her spouse die, a nominee shall be entitled to receive the entire corpus amount.

Who can invest?

  1. Any Indian citizen.
  2. Should possess an active mobile number.
  3. Contribution to the scheme for a minimum of 20 years.
  4. The age bracket is 18 years and 40 years.
  5. Must hold a bank account linked with his/her Aadhaar.
  6. Shall not be a beneficiary of any other social welfare scheme.
  7. Beneficiaries under the Swavalamban Scheme are eligible and thus migrated to this scheme.

How to apply? All banks in India are empowered to initiate a pension account under the APY.

  • Visit the nearest branch of the bank where you have an account(savings account)
  • Duly fill out the application form with required details.
  • Submit it along with two photocopies of your Aadhaar card.
  • Provide your active mobile number.

The application form from the official website of a bank can be downloaded and then follow the steps mentioned above.

  • One needs to nominate another individual and subsequently provide their KYC details when applying for APY.
  • One individual can only have a single pension account under this scheme.

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Krishna Rath is a SEBI Registered Investment Adviser, and since 2015 has been educating netizens on investments and insurance. Krishna is a fee only SEBI RIA and is Odisha's first SEBI RIA. With background in IT, Krishna is changing the advisory space with new innovations in AdvisoryTech.

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