Saturday, November 4, 2017

Atal Pension Yojna for Guaranteed Pension for Indians - Important Features

The Government of India has announced a new scheme called Atal Pension Yojana (APY).  The APY is a guaranteed pension scheme and is administered by the Pension Fund Regulatory and Development Authority (PFRDA), which also administer the NPS or National Pension Scheme.  But unlike NPS, where NRIs are also allowed to invest and open an account (see here), Atal Pension Yojna is only for residents of India and that too for Indian citizens only.

In short, NRIs are not allowed to open Atal Pension Yojna.  Another difference between NPS and Atal Pension Yojna is that you won't get that additional 50K tax saving, which you get by investing in NPS (see here)

The Atal Pension Yojna is designed for Indians who work in un-organized sectors e.g. farming, small business etc where there is no provision of pension and social security.  This is an attempt from Government to provide basic, minimum level of social security by encouraging citizens to save for their retirement.

The Atal Pension Yojna is supposed to provide guaranteed pensions of ₹1000 – ₹5000 by Government of India.

In this article, I am going to share with you some of the important features of Atal Pension Yojna e.g. who are eligible to invest and what are main benefits of it.


The Atal Pension Yojna is open for all citizens of India, but NRIs are not allowed. You must also be in the age group of  18 to 40 years, which is a big drawback because many people who are in their early 40s are looking to save for retirements but they cannot invest in Atal Pension Yojna.

Another requirement is that you must have a bank account, which is not so easy for farmers and poor people, but thanks to Jan Dhan Yojna from PM Narendra Modi Ji, many poor people have already opened a bank account in India.

In short, to open Atal Pension Yojna account, you must be

  • citizens of India
  • Age - 18 to 40 years
  • Mandatory Bank account holder

Benefits of APY

The most important benefit of Atal Pension Yojna is the guaranteed monthly pensions starting from ₹1,000 to ₹5,000 per month

The Government of India will also co-contribute 50% of the subscriber's contribution or ₹1,000 per annum, whichever is lower.

Btw, the Government co-contribution is available only for those who are not covered by any Statutory Social Security schemes and who are not income taxpayers.

For those who join the scheme between June 1 to December 31, 2015, the Government of India will co-contribute to each eligible subscriber for a period of 5 years

 Atal Pension Yojna for Guaranteed Pension for Indians - Important Features

That's all about Atal Pension Yojna. It's a good scheme for all Indians who don't have a luxury of Pension in their Job e.g. farmers, small shopkeepers and all people working in  India's unorganized sectors. Though it has some drawbacks e.g. NRIs are not allowed and many people who are more than 40 years old cannot open Atal Pension Yojna, but, nonetheless, a good initiative from Government to provide social security in old age.

Further Reading

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