The Pension Fund Regulatory and Development Authority (PFRDA) has resumed the auto-debit facility from savings bank accounts for Atal Pension Yojana (APY) from July. The move will allow APY subscribers to regularize their investment account and start saving again. The auto-debit service was stopped by the PFRDA till June 30, 2020 to provide more funds in the hands of subscribers to deal with the Covid-19 induced lockdown.
The PFRDA also added that there will be no penalty if APY contributions from April, 2020 to August, 2020 are regularised before September 30, 2020. This simply means that if you regularize your APY contribution between July 1, 2020 and September 30, 2020, there will be no penalty.
In a tweet, PFRDA said, “Auto Debit for APY contributions shall resume from July 1, 2020. No penal interest will be charged if APY contributions from April, 2020 to August, 2020 are regularized before September 30, 2020.
It is important to note here that any delay in regularizing your account after the specified deadline of September 30, 2020 will invite a penalty ranging between Re. 1 to Rs. 10 based on the contribution amount.
What Is APY Scheme?
Atal Pension Yojana is a government-backed scheme administered by the PFRDA. Its primary objective is to encourage employees in unorganized sector to save for their retirement. The scheme provides regular income in the form of pension after retirement.
Who Can Invest In APY?
Any Indian citizen in the age bracket of 18 to 40 years can open an account. Your bank account should be linked to your Aadhaar to open this account.
Pointers To Keep In Mind
- Investing in APY provides guaranteed minimum monthly pension ranging between Rs. 1,000 and Rs. 5000 per month.
- The minimum time to keep contributing in APY account is 20 years.
- You can make contributions to the pension scheme monthly, quarterly or half-yearly.
- You can choose the minimum pension amount at the time of subscription. It is fixed at Rs. 1,000, Rs. 2,000, Rs. 3,000, Rs. 4,000 and Rs. 5,000 per month.
- You cannot exit prematurely from the APY under usual circumstances. Exception can be made in the event of death/terminal illness of the subscriber.
- Your monthly contribution depends on the age you start investing in APY. For instance, an individual who is 18-years-old can contribute Rs. 42 to Rs. 210 per month. This amount increases with an increase in age.
- The contribution for this scheme is auto-debited from your savings bank account. So ensure you have sufficient funds before the debit date every month.