Pradhan Mantri Vaya Vandana Yojana (PMVVY) - Good Pension Plan for Senior Citizens

Pradhan Mantri Vaya Vandana Yojana or PMVVY was first reported in Budget 2017 and dispatched on May 4, 2017. The scheme was open till March 31, 2020. The good news is PMVVY has now been stretched out to March 31, 2023 but with lower interest rates. In this post we survey the new Pradhan Mantri Vaya Vandana Yojana and check if senior citizens ought to put resources into this? 

Pradhan Mantri Vaya Vandana Yojana Features 

• Minimum age for venture is 60 years 
• There is no Maximum age for entry 
• It gives return of 7.40% exacerbated monthly. Prior this rate was 8%. 
• You can decide to get pension monthly, quarterly, half yearly or every year 
• The maturity period is 10 years. Toward the finish of maturity period the speculation amount would be returned.
• The pension installment will be through ECS/NEFT as it were 
• On death of the policy holder, the premium is returned back to the chosen one 
• The arrangement is accessible till March 31, 2023 
• The premium is absolved from GST 
• LIC Plan Number: 842 
• UIN: 512G336V01 

PMVVY Purchase Price and Pension 

The table underneath gives the minimum/maximum price tag and the particular pension that one would get for a very long time. In the event of PMVVY, the minimum and maximum venture is set up on the amount of pension. So on the off chance that you look in the table underneath the minimum pension that can be given in monthly choice is Rs 1,000 thus you need to contribute Rs 162,162. Essentially the maximum monthly pension you could get with Pradhan Mantri Vaya Vandana Yojana is Rs 9.250. For that you have to contribute Rs 15 Lakh. 

  PMVVY Investment/Pension Limit                   Monthly       Quarterly      Half Yearly      Yearly 

Minimum Investment       Pension Amount          1,000             3,000             6,000           12,000 

                                        Speculation Required        162,162        161,074         159,574       156,658 

Maximum Investment         Pension Amount         9,250            27,750          55,500        111,000 

                                        Speculation Required     150,000       1,489,933      1,476,064    1,449,086 

The maximum speculation limit is Rs 15 Lakh and as far as possible is Rs 156,658. You can purchase anything in the middle of (counting the two amounts). As far as possible above is for one family. Family here methods mate and the wards. 

Tax on PMVVY 

The pension got is added to your yearly salary and taxed dependent on your pay tax chunk. 

PMVVY Surrender Value 

The policy can be surrendered under uncommon conditions like money needed for the treatment of any basic/terminal ailment of self or companion . The Surrender Value payable will be 98% of Purchase Price. 

Loan on PMVVY 

Loan office is accessible after culmination of 3 policy years. The maximum loan that can be conceded will be 75% of the Purchase Price. The rate of interest to be charged for loan amount would be resolved now and again by LIC. For the loan authorized till 30th April, 2021, the material interest rate is 9.5% p.a. for the whole term of the loan. Loan interest will be recouped from pension amount payable under the policy. 

PMVVY Free look-into period 

In the event that a policyholder isn't happy with the "Terms and Conditions" of the policy, he/she may return the policy to the Corporation inside 15 days (30 days if this policy is bought on the web) from the date of receipt of the policy expressing the explanation of protests. 

The amount to be refunded inside free look period will be the Purchase Price kept by the policyholder in the wake of deducting the charges for Stamp obligation and pension paid, assuming any. 

Pradhan Mantri Vaya Vandana Yojana Review 

The good 

• This is a basic item with an ensured return. 
• The scheme is ensured by Government of India and is managed by LIC. So it has wellbeing of most significant level. 
• As the economy builds up the interest rates descend. Consequently it's a good item to bolt 7.4% interest rates for a very long time. Anyway banks too offer fixed store residency for a very long time. 
• The policy can likewise be surrendered before maturity for treatment of ailment. 
• 75% Loan against policy can be a good thing for crisis liquidity needs. 
• No GST on the premium paid for PMVVY dissimilar to other pension items. 

The Bad 

• The pension you get is taxable. This would be added to your pay and taxed at your minimal tax rate, like fixed deposits. 
• The amount is secured for a very long time, so the money may not be accessible whenever required critically (other than in the event of sickness) 
• The pension isn't acclimated to expansion. Accepting swelling at 7%, the buying intensity of Rs 5,000 would lessen to Rs 2,500 out of 10 Years. 

How to Buy Pradhan Mantri Vaya Vandana Yojana? 

You can purchase Pradhan Mantri Vaya Vandana Yojana online through LIC site or contact LIC agent to get it disconnected. 

Ventures offering over 7.4% for Senior Citizens 

There are scarcely any speculations which actually offer over 7.4% returns for senior citizens. You should investigate the equivalent before submitting your funds to Pradhan Mantri Vaya Vandana Yojana. 

Senior Citizen's Saving Scheme 

Senior Citizens Saving Scheme offers 7.4% interest which is payable quarterly. This implies SCSS interest is marginally lower than PMVVY as PMVVY pays a similar 7.4% monthly. The other issue is with SCSS you can secure your venture for a very long time as it were. One advantage of SCSS is it's eligible for tax advantage u/s 80C. 

Bank Fixed Deposits 

A couple of banks like RBL, DCB, IDFC Fist bank offer higher interest rates on their fixed deposits for senior citizens. All these FDs are aggravated quarterly. 

• DCB offering 7.85% for 3 to 10 years fixed store 
• IDFC First bank offers 7.75% interest for 1 to long term fixed store 
• RBL offers 7.65% for 5 to 10 years store 

There are Small banks like Suryoday Small Finance Bank which offers 9.25% interest for long term FD for senior citizens. There are various Small banks offering over 7.5% on their senior resident's FDs. 

NCDs/Bonds 

There are new issues of NCDs which offer interest higher interest in the scope of 8% to 10%. Anyway there is some credit hazard included and you should possibly put resources into these on the off chance that you comprehend and can face such challenges with your retirement money. 

You can likewise purchase bonds from stock exchange through your demat account. Notwithstanding, the issue is the liquidity for these bonds are low and subsequently it's hard to purchase/sell. Anyway you can purchase effectively when they are given. 

SWP in Debt Mutual Fund 

Customary salary can be generated by putting resources into Debt Mutual Funds and afterward utilizing SWP (Systematic Withdrawal Plan). The returns are like fixed deposits of banks. It's more fit on the off chance that you are in most noteworthy tax section. 

Tax Free Bonds 

PFC, HUDCO, NABARD, IRFC and so on had given tax free bonds previously and are accessible on exchanges with yields in the scope of 5.5%. The bonds have lingering maturity of 10 to 15 years. As the interest got is without tax, these end up being better speculations for senior citizens in most noteworthy tax section. The interest payout is yearly. Additionally all the organizations are supported by Government of India and furthermore AAA rated – subsequently alright for venture. 

Would it be advisable for you to put resources into PMVVY? 

Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a good and straightforward item particularly for aged individuals searching for normal salary after retirement. In any case, there are different speculations as recorded above which offer more returns. You should assess those before securing your money in the pension plan. 

Pradhan Mantri Vaya Vandana Yojana FAQs 

How would i be able to purchase Pradhan Mantri Vaya Vandana Yojana? 

PMVVY is sold by LIC. It tends to be purchased online through LIC's site. On the off chance that you need to get it disconnected, you can move toward a LIC agent or LIC office. 

What is maximum I can put resources into Pradhan Mantri Vaya Vandana Yojana? 

You can put maximum of Rs 15 Lakh in PMVVY. It will give a pension of Rs 9,250 consistently. This cutoff is on family level (incorporates your mate and any wards). 

Can I get Loan on Pradhan Mantri Vaya Vandana Yojana? 

Loan office is accessible after culmination of 3 policy years. The maximum loan that can be allowed will be 75% of the Purchase Price. The rate of interest to be charged for loan amount would be resolved occasionally by LIC. For the loan endorsed till 30th April, 2021, the relevant interest rate is 9.5% p.a. for the whole term of the loan. Loan interest will be recouped from pension amount payable under the policy. 

Can I take surrender Pradhan Mantri Vaya Vandana Yojana? 

The PMVVY policy can be surrendered under remarkable conditions like money needed for the treatment of any basic/terminal ailment of self or companion . The amount of Surrender Value payable will be 98% of Purchase Price. 

Does interest in Pradhan Mantri Vaya Vandana Yojana spares tax? 

No interest in Pradhan Mantri Vaya Vandana Yojana isn't eligible for any tax advantage.