Atal Pension Yojana: How can you withdraw my account? What happens on payment defaults — Check FAQs

Atal Pension Yojana (APY) is a government initiative administered by the Pension Fund Regulatory and Development Authority (PFRDA) with the aim to create a universal social security system for all Indians.

Part of the broader National Pension System (NPS), it provides pension cover for the poor, underprivileged, and unorganised sector workers.

Atal Pension Yojana: Key highlights

• Any Indian citizen within the age group of 18-40 years, can join Atal Pension Yojana irrespective of their employment status or employer.
• You can open an APY account through your bank or post office using an Aadhaar-linked savings account. You can also open a new bank or post office account and complete Aadhaar-KYC to gain access to the pension scheme.

• APY subscribers are set to receive guaranteed minimum monthly pension payout of one of the following sums: ₹1,000, ₹2,000, ₹3,000, ₹4,000, or ₹5,000 after the age of 60 years, based on the contributions made by them after joining the scheme.

How to withdraw from APY?

To withdraw the subscriber will have to submit a request to the associated bank / post office branch. Once accepted and successful, you will start receiving the monthly pension until death.

Tenure of the Atal Pension scheme is till subscriber reaches 60 years of age. In this case, you will receive 100% annuitisation of accumulated pension.

However, early withdrawal is allowed in exceptional cases — i.e. death of subscriber, or terminal disease. In case of death, the pension will be given to the spouse or nominee.

In case the account is closed before you reach 60 years of age, only subscriber's contribution plus interest earned is paid. You will lose the government’s co-contribution or the interest earned on that amount.

What happens if you default on payments?

Defaulting on the payments leads to small penalties being cut by the bank as follows: ₹1/month for contribution up to ₹100/month; ₹2/month for contribution between ₹101-500/month; ₹5/month for contribution between ₹501-10,00/month, and ₹10/month for contribution beyond ₹1,001/month.

According to a Clear Tax report, your account is frozen if you default on six months payments, and deactivated if you remain in default for 12 months (one year). The account is closed if you fail to make payments for 24 months (two years), with the remaining amount paid to the subscriber, it added.

Who is eligible to apply for Atal Pension Yojana?

• The scheme is open to all Indian citizens between 18-40 years of age.
• Since October 2022, Indians who pay income tax are deemed ineligible.

• You must have an Aadhaar-linked bank or post office savings account and valid mobile number.
• You must commit to making contributions for at least 20 years.
• Since it replaced the erstwhile Swavalamban Yojana, all previous beneficiaries were automatically migrated to APY.

How to apply for Atal Pension Yojana: Stepwise guide

• To open an Atal Pension Yojana account online, you will have to check if your bank's allows registration via netbanking facility.
• If it does, search for APY on the bank's website and register for the scheme using the auto-debit facility.

• For offline, you can visit your bank or post office for the APY form and fill in the required fields.
• You will need to submit a copy of your Aadhaar card along with the form.
• Submit the filled form and KYC at the bank or post office where you have an account.
• The bank will give you an acknowledgement receipt for the form.
• Once your application is approved, you will receive a confirmation message on your registered mobile number.

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