SBI, Canara Bank lead in opening unorganized sector pension accounts

State Bank of India has opened the largest number of accounts under India’s universal pension scheme for the unorganized sector, the government said today.

State Bank of India has opened 51,000 out of the total 3.07 lakh pension accounts opened by banks under the scheme, which guarantees a rate of return of at least 8%. Most recurring deposits in India now generate interest rates of around 6.5-7.0% in India.

Canara Bank opened 32,306 APY accounts, Andhra Bank 29,057.

Allahabad UP Gramin Bank opened 28,609 accounts followed by Madhya Bihar Gramin Bank at 5,056 APY accounts and Baroda Uttar Pradesh Gramin Bank at 3,013 APY accounts.

Under the so-called Atal Pension Yojana, for every contribution made to the pension fund, the Central Government would co-contribute 50% of the total contribution or up to ₹1,000 per year, for a period of 5 years.

The person will also get a corpus amount when retiring. For example, someone who signs up for a pension of Rs 3,000 per month will get a one-time payment of Rs 5.10 lakh on retirement.

The minimum age of joining APY is 18 years and maximum age is 40 years and pension will start at 60 years. The scheme is not open for those who already have any kind of pension.

The person who joins the scheme has to decide how much pension he or she wants to get. The amount has to be between Rs 1,000 and Rs 5,000 per month. Depending on this amount, the person’s monthly contribution to the fund will be decided.

A subscriber joining the scheme of Rs. 5,000 monthly pension at the age of 18 years would be required to contribute Rs 210 per month. However, if he joins at age 40, he has to contribute Rs 1,454 per month.

“At a time when the interest rate on various financial instruments including Savings Bank is declining, Atal Pension Yojana as a pension scheme offers a guaranteed rate of 8% assured return for the subscribers and also the opportunity of higher earnings in case the rate of return is higher than 8% at the time of maturity,” said the government.

The scheme carries a Govt of India implicit guarantee to give an assured pension to the subscriber, spouse and return of corpus to the nominee.

The Pension Fund Regulatory and Development Authority (PFRDA) organised a National Level Pension Mobilization Campaign” One Nation One Pension” from 2nd August to 19th August 2017 in association with the APY Service Provider Banks all over the country.