Many financial instruments like fixed deposits, post office savings programs, tax-free bonds, and other capital market products are all available to senior citizens to financially secure their retired life. However, there is one deposit scheme where they can invest a lump sum amount for a set period and enjoy monthly gains as a pension.

Live TV

Loading...

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a Life Insurance Corporation of India (LIC)-led immediate pension plan which can be purchased online by paying a lump sum amount. The scheme offers a stated amount as a pension for the policy term of 10 years. The total purchase price is returned to the customer at the end of 10 years. Senior citizens aged 60 or above can subscribe to the PMVVY scheme through the LIC website online.

Although, the PMVVY scheme is available for investment till March 31, 2023, but LIC is offering a guaranteed 7.4 percent per annum for financial year FY22 on this scheme for 10 years if it is purchased before March 31, 2022.

Senior citizens can get a monthly pension of Rs 9250 for 10 years by purchasing the costliest monthly pension plan for Rs 15 lakh which is the maximum purchase price under the plan. Here the total subscription amount will be returned to the subscriber at the end of 10 years. Under the scheme an elderly couple can invest Rs 30 lakh (Rs 15 lakh each) and earn Rs 18500 as pension in one family.

ALSO READ | SEBI approves LIC's updated DRHP for IPO

The minimum purchase price for a plan is Rs 1,62,162 which will provide a monthly pension of Rs 1000 per month while the subscription amount will be returned after 10 years. There are several price options offered and once an option is selected it can’t be altered in the future.

The first installment of pension under the scheme will be payable after 1 year, 6 months, 3 months, or 1 month from the date of purchase, depending on the mode of pension payment chosen which can be, yearly, half-yearly, quarterly, or monthly respectively.

The PMVVY scheme will give interest rates ranging from 7.4 percent to a maximum of 7.66 percent per annum based on the various types of pension payments.

Returns from this scheme will be taxed as per existing tax laws and the rate of tax as applicable from time to time. The scheme is exempted from Goods and Services Tax (GST).

First Published:Mar 30, 2022 1:28 PM IST