Canara Bank, which is a state-run financial institution, has launched various social security schemes in collaboration with the government. One of these schemes is the Atal Pension Yojana (APY) scheme which was launched in the year 2015 by Narendra Modi, the Prime Minister of India, at Kolkata. Canara Bank Atal Pension Yojana scheme aims to provide income security for senior citizens and also to promote and ensure their participation in the National Pension System (NPS).
The major objectives of the Atal Pension Yojana (APY) scheme is to pinpoint the longevity risks that workers in the unorganised sector face and also to promote the concept of having a retirement savings plan among them. Workers in unorganised sector constitute 88% of the total labor force, as per the NSSO Survey conducted in 2011-12. They do not have a proper pension provision, and hence the Government has launched this scheme to provide guaranteed pension benefits to citizens, by the age of 60.
In the 2015-2016 Budget, the Government had announced the institution of social security schemes under the Insurance and Pension sectors. This will be available to all Indians, focusing mainly on the poor and under-privileged sections of society. As a part of this initiative, the Atal Pension Yojana (APY) has been launched, which will offer a defined pension according to the contribution made by the individual as well as the period during which it is active.
Features of Canara Bank Atal Pension Yojana (APY) Scheme
- Only one Atal Pension Yojana (APY) Scheme account can be opened by an individual.
- It is mandatory to have a savings account in order to be able to apply for this scheme. If you do not have a savings account, you can open a Canara Bank Savings Account at any of its branches and then fill in the Atal Pension Yojana form and submit it.
- The Savings account of the subscriber will be linked to the Atal Pension Yojana Scheme through ECS (Electronic Clearing Service) and payment will be deducted automatically on the due date.
- The applicant must ensure that his/her Canara Bank Savings Account has enough funds in order to facilitate the monthly contribution to this scheme. If the applicant does not have sufficient funds in his/her account at the time of payment, a penalty will be charged.
- Under this scheme, subscribers are assured of a minimum pension ranging between Rs. 1000 to Rs. 5000 per month, at the age of 60. This would depend on other factors such as amount of contribution made by the individual, time period, etc.
- The monthly contribution amount can be any amount of the contributor’s choice. If the contributor wishes to make alterations in the amount of money paid-out, then the changes can be made once a year, in April.
- The minimum period during which a subscriber can make contributions to this scheme could be 20 years or more.
- Under the Atal Pension Yojana Scheme, an account holder can opt out of the scheme once he/she attains the age of 60 and has accumulated 100% of his/her pension wealth. Upon opting out of this scheme, the Atal Pension Yojana Scheme account holder can start earning his/her pension.
- Another context under which the Atal Pension Yojana Scheme account can be closed is in the event of death of the contributor. In this situation, the pension would be paid-out to the subscriber’s spouse. In case both the account holder and spouse has passed away, the nominee gets the pension amount.
- An account holder can also opt out from this scheme before attaining 60 years of age, under exceptional situations such as terminal disease, death of beneficiary, etc.
- Another option available for closing an Atal Pension Yojana (APY) Scheme is when the beneficiary is ready to give up the government’s contribution as well as the net interest accrued on his/her contribution.
Benefits of Canara Bank Atal Pension Yojana (APY) Scheme
Atal Pension Yojana (APY) offers a fixed pension for its contributors which ranges between Rs. 1000 to Rs. 5000 per month, provided that he/she joins the scheme and contributes towards it between the age of 18-40 years. The contribution levels are affected by when the subscriber joins the scheme - if he joins early, the contribution will be low and if he joins late the contribution will be higher. Once he/she attains 60 years of age, he/she can avail lifelong benefit.
The contributions made by the subscribers under this Scheme is invested by the Government in the following investment options:
- At least 45% and not more than 50% of the total fund is invested in Government Securities.
- At least 35% and not more than 45% of the total fund is invested in Debt Securities and term deposits of banks.
- Up to 5% of the total fund will be invested in Money Market Instruments.
- At least 5% of the total fund (not exceeding 15%) will be invested in Equity and related instruments
- Up to 5% of the total fund will be invested in Asset Backed Securities, etc.
Canara Bank Atal Pension Yojana Eligibility Criteria
Canara Bank Atal Pension Yojana (APY) Scheme is open to all canara bank account holders. The Central Government assures a 50% co-contribution or Rs. 1000 per annum, whichever is lower, towards each Atal Pension Yojana (APY) Scheme account, for every eligible subscriber account.
In order to be eligible for Canara Bank Atal Pension Yojana Scheme, the following parameters should be met:
- Subscriber should be a citizen of India.
- He/She must have a savings account scheme is associated banks like Canara Bank.
- The minimum permissible age for entry is 18 years and the maximum age is 40 years.
- Subscribers have to join the NPS scheme between the periods 1st June, 2015 - 31st December, 2015. The scheme will be available after this period, but the offer of Government co-contribution will be withdrawn.
- They should not be members of any statutory social security scheme.
- The contributor need not be an income taxpayer.
Frequently Asked Questions (FAQs) on Canara Bank Atal Pension Yojana
Will a penalty be levied on delay in payment?
Yes. If the Atal Pension Yojana (APY) scheme account holder delays the contribution to this scheme, a penalty will be levied. This would depend on the type of plan opted by the subscriber. The Savings account of the subscriber will be linked to the Atal Pension Yojana Scheme through ECS (Electronic Clearing Service) and payment will be deducted automatically on the due date. However, if the account does not have sufficient balance to conduct the transaction, then whenever a deposit is made to this account, a late payment fee will be drawn from it. The late payment charges can vary from a minimum of Rs.1 each month to a maximum of Rs.10 each month.
How is the corpus amount calculated?
The corpus amount is the sum of the yearly contribution made by the subscriber plus the government’s co-contribution plus the interest earned on this amount.
Is it mandatory to have a savings bank account to open Atal Pension Yojana Scheme Account?
Yes. It is mandatory for a subscriber to have a savings bank account, for opening an Atal Pension Yojana Scheme account. The contributions towards this scheme has to be made through the auto-debit facility from the subscriber’s savings bank account, on a monthly basis.
Can I declare a nominee for the Atal Pension Yojana (APY) Scheme?
Yes. It is mandatory that a contributor declares a nominee and provides relevant details pertaining to the same, at the time of opening an Atal Pension Yojana (APY) Scheme account. Also, they have to provide information about the spouse along with his/her Aadhaar details, wherever applicable.
How will I be informed of the status of my Atal Pension Yojana Scheme account?
All contributors will get updates about their Atal Pension Yojana Scheme account in the following ways:
- SMS alerts are sent on a periodic basis to the contributor’s mobile number which is registered with the bank at the time of application.
- A hardcopy of the account statement will be sent to the communication address provided by the contributor when he/she opened the Atal Pension Yojana (APY) Scheme account.
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