Atal Pension Yojana exit policy and procedures
The Atal Pension Yojana was introduced earlier this year by the Finance Minister Arun Jaitley. It is a new pension scheme, started by the Government of India, to help applicants pay a little cash amount to the pension account to fund their retirement when they reach the age of 60 years. The idea behind this scheme is to provide an assured return, in the form of a pension on monthly basis to the individual. If the individual who holds the pension account, unfortunately dies before 60 years then the amount in the account will be transferred to his/her spouse.
Can you exit from the policy earlier than the age of 60 years?
Yes, you can exit from this pension scheme at any time. All you are required to do is apply at your bank to close your Atal Pension Yojana (APY) account. A small penalty charge will be applied for the premature closure, however you will still receive all your money invested plus the interest it has earned as well.
So, what are the steps to close the Atal Pension Yojana?
- Go to your bank wherein you have the Atal Pension Yojana account.
- Request for an closure form for the account, fill the form correctly with all the required details.
- Submit the form to you bank, and wait for them to follow procedures.
- The bank will process the closure and provide the money and interest it earned into you savings bank account you have provided to them. And you will be notified of the same.
How does the bank process this closure?
Once the bank receives your application for closing the Atal Pension Yojana account, they will calculate the contributions made by you into the account and also the amount contributed by the government as well. The interest the amount of your contribution and the government’s contribution has accumulated will also be calculated. Your contribution and the government’s contribution will be separated, the contribution made by you with interest earned will be handed to you, after deducting the charges for maintaining the Atal Pension Yojana account for you by the bank. And the remaining will be handed to you. The separation of your contribution and the government’s contribution is done so that the bank’s charges do not get deducted from the government’s contribution as well.
All the above mentioned steps and procedures are for a voluntary exit. But the Atal Pension Yojana has an involuntary exit as well. Under the involuntary exit there are two conditions under which premature closure is allowed, these are incase of death, or due to an illness.
In case of the unfortunate demise of the account holder, the Atal Pension Yojana account will be closed. Any member of the family will need to provide relevant documents of the account holder’s death to the bank in which the account was maintained. The bank will then process the closure procedures. The money deposited and interest earned will be payable to the nominee.
In case the account holder has any terminal or critical illness, and requires the money for treatment of the medical expenses. If the account holder can show proper documentation and medical records then, this account can be closed. The bank will also need these documents to process the closure of the account.
Closing of the Atal Pension Yojana account is by far easy, the only effort needed is to actually go to the bank in which you hold the account.
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