Will monthly pension of Rs 9250 on Rs 15 lakh investment remain fixed for 10 years in PMVVY?
Guaranteed rates of pension for policies sold during the year will be reviewed and decided at the beginning of each year. If your bank fixed deposit is getting mature, renewing them may not fetch a high interest rate. Currently, most leading banks are offering interest rates between 5 and 6 per cent on their FD schemes over 1 to 10-year tenure. Pradhan Mantri Vaya Vandana Yojana (PMVVY) is an alternative investment option that one may consider for a fixed and assured return backed by a government guarantee. One can invest up to a maximum amount of Rs 15 lakh and get a regular pension income for 10 years. After ten years, the principal amount is paid back to the investor. Let us look at ten key features of Pradhan Mantri Vaya Vandana Yojana (PMVVY), including the new rules after the PMVVY scheme was modified in 2020. What is Pradhan Mantri Vaya Vandana Yojana (PMVVY)  PMVVY is a one-time lumpsum investment scheme for 10 years with an option to receive a regular income either monthly, quarterly, half-yearly or annually, in the form of pension. The amount that one invests as lump sum is called the purchase price. What is new in PMVVY  Pradhan Mantri Vaya Vandana Yojana (PMVVY) is essentially a government of India scheme aimed at providing a regular income to senior citizens. The working and features of PMVVY have been modified in 2020 and now the scheme comes with a modified rate of pension. Interest payments  As per the terms and conditions under this plan, guaranteed rates of pension for policies sold during a the year will be reviewed and decided at the beginning of each year by the Ministry of Finance, Government of India. For the first financial year i.e. upto 31st March 2021, the Scheme provided an assured pension of 7.40 per cent per annum payable monthly. As per the LIC website, this is what it states  For Financial Year 2021-22, the Scheme shall provide an assured pension of 7.40 per cent per annum payable monthly. This assured rate of pension shall be payable for the full policy term of 10 years for all the policies purchased till 31st March, 2022. The pension will, therefore, remain fixed for 10 years at the rate declared for that FY. PMVVY Benefits  This is what one gets as a regular income, on death during the tenure and on the maturity of PMVVY. a. Pension Payment: On survival of the Pensioner during the policy term of 10 years, pension in arrears (at the end of each period as per mode chosen) will be payable. The Pensioner will have to submit the Life Certificate in the proforma of the LIC or online Jeevan Pramaan at the time intervals as prescribed from time to time. The pension payments shall be released only on receipt of the Life Certificate. b. Death Benefit: On death of the Pensioner during the policy term of 10 years, the Purchase Price shall be refunded to the beneficiary. c. Maturity Benefit: On survival of the pensioner to the end of the policy term of 10 years, Purchase price along with final pension, installment will be payable. PMVVY pension rates  The pension rates for Rs 1000 Purchase Price for different modes of pension payments are:  Yearly: Rs 76.60 per annum  Half-yearly: Rs 75.20 per annum  Quarterly: Rs 74.50 per annum  Monthly: Rs 74.00 per annum  Therefore, depending on the pension option, the PMVVY interest rate will vary between 7.4 per cent and 7.6 per cent per annum. Features  The minimum age of entry is kept at 60 and the minimum and maximum amount that can be invested as well the minimum and maximum amount of pension are also fixed. Maximum investment and pension  The maximum investment allowed in PMVVY is Rs 15 lakh under monthly pension option while the maximum pension will be Rs 9250 per month. This means if both spouses are above age 60, total investment can be Rs 30 lakh and the family can receive a monthly pension of Rs 18500 per month for 10 years. Last date extended for PMVVY  The last date extension for PMVVY investment stands at 31st March, 2023. However, the guaranteed pension rates for policies sold during the next FY will be reviewed and decided at the beginning of next FY year. PMVVY  Where to buy  LIC of India is solely authorized to operate this scheme. This scheme can be purchased offline as well as online. The purchase of the policy under this Government subsidized scheme requires Aadhaar number validation.