National Pension Scheme Vs Atal Pension Yojana
Published On Feb 24, 2022 10:40 AM By InsuranceDekho
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Retirement is defined as a stage in life during which a person does not actively work and does not have a recurring monthly source of revenue. Retirement is all about relaxing; yet, in order to live a stress-free retirement life, you'll need a consistent stream of money to cover your daily costs. As a result, while an individual is actively working, it is critical to build a retirement corpus in order to live an independently wealthy life.
The retirement fund would assist in meeting post-retirement expenditures. There are a variety of financial options especially when it comes to financial planning. The NPS and the APY are two such options introduced by the Indian government. To get to know about the difference between the national pension scheme & atal pension yojana, read on.
Info On National Pension Scheme
The Central Government's National Pension Scheme (NPS) is indeed a long term investment program. It is governed by the Pension Fund Regulatory and Development Authority (PFRDA) and is available to employees from both the public and private sectors, as well as those in the unorganised sector. Investors must contribute to a pension fund during their work as part of the system. Employees can get a percentage of the company's assets once they retire. The remaining funds will be paid out to the employee on a monthly basis as a pension. It provides an option for those with a low risk appetite to engage in a secure instrument. People's lives may change as a result of this.
Info On Atal Pension Yojana
The Atal Pension Yojana was established to provide a pension plan for the unorganised sector. The scheme's main goal is to equip Indian residents with a safety net against disease, accidents, and other calamities. The cash collected under the pension programme is to be administered by the Pension Fund Regulatory Authority of India, according to existing legislation.
Difference Between National Pension Scheme & Atal Pension Yojana
One retirement planning program that delivers market-linked returns is the National Pension Scheme. Individuals can engage in the NPS till they reach the age of 65. Within the NPS, there are four different types of funds and two different investing techniques. Well within a proactive or auto approach, the user may spend in some of the four funds accessible. The financial market has a big influence on the returns. Sixty percent of the accumulated corpus can be taken in a single payment at maturity, while the remaining 40 percent is paid out as annuities for the rest of one's life.
The Atal Pension Yojana, on the other hand, is an Indian government-sponsored retirement programme that provides a fixed pension to low-income unorganised sector workers. Individuals under the age of 40 may deposit in the Atal Pension Yojana. When a person reaches the age of 60, the APY plan matures. Within the system, there are five different types of guaranteed pension sums. The sum would be in the region of Rs 1000 to Rs 5000. Individuals who invest in the Atal Pension Yojana plan have the option of choosing their own pension amount. The amount that has to be donated to the system is determined depending on the age, size of pension, and contribution frequency.
Following are the similarities between National Pension Yojana & Atal Pension Yojana -
- The PFRDA is in charge of the APY and NPS.
- Both the APY and the NPS are retirement-oriented plans that aid in the accumulation of retirement assets.
- Once both schemes have reached their maturity dates, the individual will receive a set pension sum for the rest of his or her life.
It is essential to make investments in order to live a stress-free retirement. Whether an individual chooses APY or NPS, the plan should meet all of the conditions for a happy retirement. The National Pension Scheme and the Atal Pension Yojana both provide financial stability for retirees.
Also Read: Some Tips To Plan For Retirement
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.