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Home >Money >PMVVY is a good option for elderly

If you are a senior citizen looking for a regular income, the Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a government-backed scheme sold through Life Insurance Corp. of India, which can provide you a regular guaranteed income. A senior citizen aged 60 years and above can invest in the scheme to receive monthly, quarterly, half-yearly and yearly pension.

The interest rate on PMVVY is declared by the government during the start of the financial year in April. This year’s rate is yet to be announced. Until last year, it was offering an interest rate of 7.4%, equivalent to its alternative Senior Citizens Savings Scheme (SCSS).

The PMVVY has a tenure of 10 years and one is required to make a lump-sum payment. Investors would get 7.4% for the entire tenure of 10 years.

Senior citizens can draw a minimum pension of 1,000 per month, depending on the amount invested. The maximum amount that can be withdrawn is 9,250 per month. One can invest up to 15 lakh in this scheme. An investment of 162,162 can fetch a minimum pension amount of 1,000 per month under the scheme.

PMVVY is often compared to SCSS. While returns from SCSS and PMVVY are comparable, experts generally prefer SCSS due to its lower tenure and better liquidity.

However, if you have exhausted your SCSS limit of 15 lakh, you can consider investing in PMVVY as there are not many options that provide predictable consistent returns for the long term in the current volatile times.

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