Atal Pension Yojana: who can join, what you pay and what you get at 60
Atal Pension Yojana, or APY, is a government pension scheme for people who do not have a regular pension from an employer. Think of a shop assistant, a delivery rider, a domestic worker or a small farmer. You pay a small fixed amount every month, and from the age of 60 you get a fixed monthly pension. This guide explains who can join, what it costs, and the rules to know before you start.
The basics
According to the Pension Fund Regulatory and Development Authority (PFRDA) APY FAQ page, the scheme offers a minimum pension, backed by the Government of India, of Rs 1,000, 2,000, 3,000, 4,000 or 5,000 a month, starting at 60 and continuing until death, depending on what you contribute for the pension amount you choose.
To join, the page says you must be between 18 and 40 years of age and have a savings bank or post office savings account. A minor cannot open an account. From 1 October 2022, anyone who is or has been an income tax payer cannot open a new APY account. People who joined on or before 30 September 2022 can continue even if they later pay income tax. You may hold only one APY account.
What happens at 60 and after
The PFRDA page lists three benefits. The subscriber gets the chosen pension from age 60 until death. After the subscriber's death, the spouse gets the same pension until their own death. After both have died, the nominee gets the pension wealth accumulated up to the subscriber's age of 60. The FAQ describes these minimum pension amounts as backed by the Central Government.
What you pay
The contribution depends on your age when you join, the pension you choose and how often you pay (monthly, quarterly or half-yearly). The official APY chart gives these monthly amounts for a Rs 5,000 pension:
- Joining at 18: Rs 210 a month for 42 years.
- Joining at 25: Rs 376 a month for 35 years.
- Joining at 35: Rs 902 a month for 25 years.
- Joining at 40: Rs 1,454 a month for 20 years.
The same chart lists Rs 8.5 lakh as the indicative corpus returned to the nominee for the Rs 5,000 pension.
A worked example
Take a 25-year-old who chooses the Rs 5,000 pension and pays monthly. The chart says Rs 376 a month, for 60 minus 25 = 35 years.
- Months of payment: 35 x 12 = 420.
- Total paid: Rs 376 x 420 = Rs 1,57,920.
Now take someone who waits until 35. The chart says Rs 902 a month for 25 years.
- Months of payment: 25 x 12 = 300.
- Total paid: Rs 902 x 300 = Rs 2,70,600.
Both get the same Rs 5,000 monthly pension at 60, but the later joiner pays Rs 1,12,680 more in total (Rs 2,70,600 minus Rs 1,57,920). The PFRDA page makes the same point: joining early reduces what you contribute for the same pension.
Missed payments, exit and changes
Contributions come out of your bank account by auto-debit. If a payment is late, the FAQ says banks collect Rs 1 of every Rs 100 of contribution, or part of it, per month as overdue interest, and it is added to your pension corpus. An APY account does not close because of non-payment, and you can catch up by paying the overdue amount with that interest. Voluntary exit before 60 is allowed, but you then get back only your own contributions plus accrued income after charges, and you lose the pension benefits. You can change the pension amount once a year; a fee of Rs 50 applies other than for errors.
Before you decide
A fixed pension of Rs 5,000 will buy less in thirty years than it does today, because prices rise. Think about whether it should be one part of your retirement planning, not all of it. Use the Gunaka Atal Pension calculator to see the contribution for your age. It uses the official chart and gives estimates, not financial advice.
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