Atal Pension Yojana (APY)

Atal Pension Yojana (APY) was started on May 9, 2015, to establish a complete social security system for all Indians, especially the poor, the underprivileged, and employees in the informal sector.

APY is a voluntary retirement savings program. It encourages low-income families, disadvantaged communities, and the informal sector to save for their future retirement. The Pension Fund Regulatory and Development Authority (PFRDA) manages the APY scheme.


APY’s main aim is to guarantee that people have social and financial security in their old age. It does this by allowing people to build consistent savings throughout their working years. APY’s goal is to give a minimum guaranteed monthly pension in different slabs to those who are above 60 years.


Any Indian citizen can participate in the APY program. The eligibility requirements are:

  • The subscriber’s age should be between 18–40 years old at the time of signing up.
  • They should have a savings bank account or a post office SB account to avail of APY’s benefits.

During the registration process, the potential candidate may choose to give the bank or post office their Aadhaar number and mobile number to get frequent updates on their APY account. However, the Aadhar number is not mandatory for enrolment in the APY program.

How to open an APY account

  • Visit the bank branch/post office where your savings bank account is maintained, or open a new account if you do not have one.
  • Fill out the APY registration form with the bank personnel’s assistance.
  • Provide your Aadhaar number or mobile number. It is not mandatory, however, it makes communication easy.
  • Maintain the necessary balance in the savings bank account or post office SB account for monthly/quarterly/half-yearly contribution transfers.


  • APY is available for all bank and post office savings account users aged 18 to 40. The contributions change based on the pension amount chosen and sign-up age.
  • You can make the contributions monthly, quarterly, and half-yearly at your convenience.
  • A guaranteed minimum pension ranging between ₹ 1,000–5,000 per month will be paid to subscribers at the age of 60, based on their contribution level to the APY scheme.
  • Subscribers can also leave the APY program. This is subject to the terms specified voluntarily. The return amount under such conditions will be calculated after deducting the government’s co-contribution and any return or interest earned on it.
  • If the collected amount based on your contribution gives less than the expected return on investment and is not enough to pay the minimum guaranteed pension, the Central Government will pay for the deficit. However, greater investment returns mean better pension payments.
  • If a subscriber passes away before reaching the age of 60, their spouse may continue contributing to the APY account for the remainder of the vesting term.

Unique features of the APY

For the first five years (from 2015–16 to 2019–20), the Indian government co-contributed 50% of the subscriber’s contribution or ₹1,000 per annum, whichever was lower. Those subscribers who joined between June 1, 2015 and March 31, 2016 – who were not tax-payers and not covered by any statutory social security scheme – availed this benefit.

Retirement benefits

APY’s main benefit is retirement security. The pension amounts vary based on the payments made to the program and may range from ₹ 1,000–5,000 per month. The spouse receives the pension in the case of the subscriber’s death.

●       Tax advantages

The government provides tax benefits on contributions to encourage people to join the APY. Its tax benefits are under Section 80CCD (1B), up to a maximum of ₹ 50,000, which will help to reduce the subscriber’s taxable income.

●       Death benefits

In case of the contributor’s death, the APY payments go to their spouse, who is the default nominee. In case of the contributor’s death before the age of 60, the spouse may continue contributing. They can also choose to receive the collected benefits and terminate the scheme.

Final words

You must understand APY if you want to know how your money grows, especially if you make small monthly payments that produce significant long-term returns. If you start saving and investing early, the compounded returns may help your money grow. So, why not start saving for retirement now?

Leave A Comment

Your Comment
All comments are held for moderation.