Pradhan Mantri Vaya Vandana Yojana Envision a lifestyle after work, where there are no worries concerning financial matters. This is what PMVVY aims at providing to the older generation of India. Launched on 28th July 2017 by government of India, this scheme was intended to give monetary assurance and steady income to people who have crossed over sixty years of age.
The life insurance corporation of India (LIC) manages this plan on behalf of the government. With it, you will find out that if these years were golden or not. This periodic payment could be made out every month, quarter-half yearly or yearly for ten years. The PMVVY provides a guaranteed interest rate of 7.40%.
Simply put, PMVVY is similar to having a private cushion for managing finances which keeps on Increasing throughout time as one enjoys life. You might need some extra amounts for your hobbies or travel all over the world in search for peace or else security in terms of your financial prospects; then you can go for this plan since it has got sufficient features that cater all these aspects and more to it As a result, one must note that this product is purely administered by LIC so as to avail reliable services as well as assistance.
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The period of sale for Pradhan Mantrai Vaya Vandana Yojana has been prolonged from financial year 2020-21 to March 31st, 2023.
Key Features of PMVVY
- Eligibility: Indian citizens aged 60 years and above.
- Maximum Investment: INR 15 lakh.
- Rate of Interest: 7.40% per annum.
- Maturity Tenor: 10 years.
- Pension Payment Modes: Monthly, quarterly, half-yearly, or yearly.
- Loan Benefits: Up to 75% of the amount after three years.
- Fund Withdrawal Options: Available upon maturity, surrender, or the pensioner’s death.
- Taxation: Interest earned is taxable, while principal deposits are exempt under Section 80C of the Income Tax Act, 1961.
- Grievance Redressal: Customers can contact FinancialDost through their branch office, official website, email, or toll-free numbers for any grievances related to their PMVVY account.
Features and Benefits of Pradhan Mantri Vaya Vandana Yojana
Higher returns are provided by PMVVY as opposed to the fixed deposits made available by Indian banks or non-banking finance corporations.
On a one-year fixed deposit with a public sector bank, for example, the interest earned for current financial year ranges from 5% to 6.35%. On the other hand, PMVVY’s annual return rate is at 7.4%.
Therefore, it is important for investors intending to sign up for the scheme to be aware of some key features of PMVVY before doing so.
Eligibility
The eligibility criterion for policy purchase is that the individual should be of Indian descent and must have attained the age of 60 or above. In order to buy this policy, you have to be Indian citizen who is at least 60 years old.
Investment As at present, a person can invest maximum of INR 15 lakh in this scheme.
Rate of Interest This investment has an interest rate of up to 7.4 % for old-age people from April 1, 2022 to March 31, 2023. On a monthly basis, the policyholder receives this interest in their accounts.
Rate of Interest The Pradhan Mantri Vaya Vandana Yojana provides an assured rate of interest throughout its life which is limited only to 10 years for those who buy it before March 31st 2023. The policy would provide regular payouts over a 10-year period until maturity date.
Mode and Quantum of Pension Payment
Account holders are permitted to deposit a one-time amount under the PMVVY plan and have the option of choosing how they will receive their pensions. They may opt for monthly payments, quarterly payments, half-yearly payments or annual payments depending on what suits them over ten years from purchasing the policy.
How much a policyholder earns as her pension amount depends on both purchase price and payment method chosen by him or her. For example, if someone pays INR 15 lakh then he/she will be able to get maximum monthly pension of INR 9,250. This is the same with an annual pension of INR 1,11,000 derived from an investment worth INR 14,49,086. Moreover if a person buys this financial product at 14,89 INR 933 then his/her quarterly payment will stand at 1,61 074 while buying it at 14,76 INR 064 would result in half-yearly contribution coming to 1,59 574.
Help with loans
In PMVVY scheme, after three years of buying the policy, holders can take up to 75 percent of their deposits as loan. These loans will be sanctioned with an interest rate of 9.5 percent annually as indicated in the policy document till April 30th, 2021.
Note: In case a policyholder dies or surrenders their policy during its tenure, outstanding amounts including any due interest on loans already taken out will be subtracted from any payments made by the insurer.
Fund Withdrawal Options
People who deposited funds under the PMVVY scheme are allowed to withdraw or claim funds under the following conditions:
In case of pensioner’s death: A nominee is required to submit discharge form with original copy of policy document, title proof and death proof to the corporation within 90 days from the date when policyholder dies.
Surrender Benefit payable: The scheme permits early exit on exceptional cases and emergencies. The pensioner should submit a discharge form along with original policy document and proof for medical treatment of self or spouse. Thus, he will get 98% value of purchase.
Maturity Benefit payable: After lapse of ten years, pensioners will receive complete face value plus last pension installment so as to terminate their policies upon presenting both discharge form and original document of the policy.
Nomination
The policyholder can nominate a person to whom the money secured by the policy shall be paid in the event of his death while opening account or before maturity. If the nominee is a minor, assignee can also be selected for receiving the money.
Taxation
Only the interest earned on PMVVY is subject to income tax deductions as per applicable rates however, principal deposits made under this scheme are exempt from income tax under section 80C of Income Tax Act, 1961.
Grievance Redressal Mechanism
For all grievances regarding their Pradhan Mantri Vaya Vandana Yojana account customers can visit the LIC branch office or www.FinancialDost.com. Furthermore, it is possible to send an email to co_crmgrv@licindia.com or phone the toll-free numbers – 155255 or 1800 425 4732.
Steps to Open Pradhan Mantri Vaya Vandana Yojana Account
Check with Your Branch for Account Opening
All LIC branches can open Pradhan Mantri Vaya Vandana Yojana accounts.
The lovers earn the interest on this scheme are deposited to their account on a monthly basis.
By using the FinancialDost’s official website, a depositors can simply open policy account by filling an easy-to-understand form. On submitting it, they will get a reference ID number as well as name and phone numbers of agents who are going to contact them for verification and processing of their application.
Carry Documents Required
Proof of Identity: Depositors’ passport-size photographs.
Submit the policy form with details.
Proof of Age: Policy is issued based on the age of the pensioner as declared in the proposal form. PAN Card, Aadhaar Card will be valid.
Nevertheless, LIC didn’t state these prerequisites clearly enough; however, you can bring relevant papers for evidence of revenue, age authentication, place verification as well as retirement validation.
Submit Your Application Form
Submission of application forms may either be done online or one can pick them up from LIC branch physically. Applicants should read through all the terms and conditions that go along with Pradhan Mantri Vaya Vandana Yojana before submitting their application forms.
Collect Your Passbook
Once the LIC verification process is complete, policyholders are provided with a passbook, which contains information such as:
- Date of account opening
- Policy number
- The amount deposited in the account
- Details on interest you will earn on a quarterly basis
- The maturity date of the account
- Beneficiary details, etc.
FAQ
What is the eligibility criteria for opening a PMVVY scheme?
Senior citizens of Indian origin aged 60 years or above are eligible to open a PMVVY account.
Which is better: PMVVY scheme or Senior Citizens Savings Scheme?
In addition to being relatively equal each year, PMVVY’s and SCSS’interest rates are hovering around 8%. A senior citizen can get tax exemption on these types of pension schemes if he/she invests below INR 1.5 lakh in a year. TDS applies to all interests earned in PMVVY.
You can open a PMVVY account at any LIC branch office or through the official website of FinancialDost.
What is the maximum investment allowed under the PMVVY scheme?
How will I receive my pension amount?
The pension amount will be credited to your account through NEFT or Aadhaar-enabled payment systems, depending on the payment mode you choose.
What happens to my investment in the event of my death?
In case of death, the nominee must submit a discharge form, policy document, proof of death, and proof of title to claim the benefits.
What are the tax benefits under PMVVY?
Interest earned is taxable, but the principal amount is exempt under Section 80C of the Income Tax Act, 1961.
Are loan benefits available under PMVVY?
Yes, up to 75% of the deposit amount can be availed as a loan after three years, with an interest rate of 9.5% per annum (as per the policy document valid until April 30, 2021).