Atal Pension Yojana vs. National Pension Scheme
Updated On Nov 27, 2023
Table of Contents
Retirement is characterized as a stage of life during which a person does not actively work and has no reliable source of income each month. The whole point of retirement is to unwind, but in order to do so, you'll need a steady income to support your daily expenses. As a result, in order to live a financially independent life while still working, it is essential to accumulate a retirement corpus. In order to pay for post-retirement expenses, the retirement fund would be helpful.
Particularly when it comes to financial planning, there are many different financial possibilities. The Indian government has offered two such options: the NPS and the APY. Though APY and NPS are pensions schemes, there are various differences between these two. Let us learn more about the distinctions between the national pension plan and the atal pension yojana.
Understanding APY and NPS
The National Pension Yojana and Atal Pension Yojana are comparable in the following ways:
- The APY and NPS are under the control of the PFRDA.
- Both the APY and the NPS are retirement-focused programs that help with the building of assets for retirement.
- The person will get a fixed pension amount for the remainder of his or her life after both plans have achieved their maturity dates.
What is National Pension Plan?
The National Pension Scheme (NPS) of the Central Government is a long-term investment scheme. Employees in the public, private, and unorganized sectors can use it, and it is regulated by the Pension Fund Regulatory and Development Authority (PFRDA). As part of the system, investors are required to make contributions to a pension fund while employed. When they retire, employees may get a portion of the company's assets.
The employee will get a monthly pension payment from the leftover monies. It offers a secure instrument for individuals with a modest appetite for risk to use. This might have an impact on how people spend their lives.
What is Atal Pension Yojana Information?
To offer a pension plan for the unorganized sector, the Atal Pension Yojana was created. The fundamental objective of the program is to give Indian citizens a safety net against illness, mishaps, and other disasters. According to current law, the Pension Fund Regulatory Authority of India is responsible for managing the money received under the pension scheme.
Difference between Atal Pension Yojana and National Pension Scheme
Here is the difference between NPS and APY pension schemes in the below mentioned table:
| NPS | APY |
| Full Form: National pension Scheme | Full Form: Atal Pension Yojana |
| The National Pension Scheme is one retirement planning scheme that offers market-linked returns. | The Atal Pension Yojana is an Indian government-sponsored retirement scheme that offers low-income unorganized sector employees a set pension. |
| There are four distinct types of funds and two different investment strategies offered by the NPS. | There are five main categories of guaranteed pension amounts available under the scheme. |
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Until they are 65, anyone can participate in the NPS. The user may spend in one or more of the four available funds in a proactive or automatic manner. |
People under 40 may contribute to the Atal Pension Yojana. The APY plan matures when an individual turns 60. The amount would be between Rs. 1000 and Rs. 5000. |
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The results are significantly influenced by the financial market. At maturity, 60% of the whole corpus can be withdrawn as a single payment, and the remaining 40% is distributed as annuities for the remainder of the investor's life. |
The Atal Pension Yojana scheme gives investors the option of selecting their own pension amount. The amount that must be contributed to the system is based on the contributor's age, pension size, and frequency of contributions. |
APY Vs NPS Final Take Away
Making investments is crucial if you want to have a stress-free retirement. Whether a person opts for APY or NPS, the plan should satisfy every requirement for a fulfilling retirement. Both the Atal Pension Yojana and the National Pension Scheme give retirees financial security.
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