Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a pension scheme, subsidized by the Government of India. This scheme was launched on May 4th 2017 and has been extended till March 2020.
The money you invest in PMVVY scheme is called the “purchase price”. PMVVY gives you an assured pension. Depending on the pension option you choose, you get a monthly, quarterly or a yearly pension. PMVVY has doubled the maximum amount you can invest from Rs 7.5 Lakhs to Rs 15 Lakhs per senior citizen.
With PMVVY, you a senior citizen can earn a maximum pension up to Rs 10,000 a month. With PMVVY, senior citizens can earn steady regular income when FD interest rates are going down. You get a fixed and assured pension for a period of 10 years (till the scheme matures).
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PMVVY has been implemented through LIC (Life Insurance Corporation of India) to provide pension and security to elderly citizens (60 years and above), against a fall in interest income when FD interest rates fall. PMVVY offers a guaranteed rate of return of 8% a year for 10 years.
You can invest in the PMVVY scheme at Life Insurance Corporation (LIC). PMVVY has a policy term of 10 years and if the pensioner dies within the policy term, the purchase price is paid to the nominee.
You get a loan up to 75% of the purchase price after 3 years of availing the policy to meet an emergency. At the end of the policy term (which is 10 years), you (the pensioner) get back the purchase price, along with your final pension installment.
If you/spouse suffer a critical ailment/disease and need money for emergency hospitalization, you can make a premature exit from the PMVVY Scheme. You get back 98% of the money you have invested (purchase price), if you are forced to make such a premature exit.
You can earn a return of 8-8.3% each year from the PMVVY till the end of the tenure, depending on the payout you choose. The payouts are monthly, quarterly, half-yearly or yearly.
PMVVY has no tax benefits and the pension earned is taxed in the year you receive it. PMVVY is exempt from service tax.
Many senior citizens look for safety of the money invested and assured returns when choosing an investment. This makes FDs a favorite with senior citizens as banks offer senior citizens a higher rate on FDs.
An investment in PMVVY is guaranteed by the Government of India and is very safe. It also offers a high return of 8% a year for a period of 10 years.
Interest rates offered by fixed deposits can go down (FDs interest rates went down after demonetization), and an investment in PMVVY can assure higher returns in such times. No single investment can give the benefits of safety, liquidity and high returns and this means you need to diversify your portfolio.
See Also: National Pension System
Invest in the PMVVY and enjoy safety on your investment and an assured pension.
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