National Pension Scheme (NPS) vs Atal Pension Yojna (APY)
Atal Pension Yojna – Atal pension yojana or the prime minister pension scheme is an unique retirement policy introduced for the people residing in the rural area. This plan allows any person from the rural area to between 18 years to 40 years of age to make payment towards this plan and get the benefits that comes with this scheme, which was previously not available to them. The payments can be made towards this scheme through half yearly , quarterly and monthly premium paying options.
National Pension Scheme – The national pension scheme was a instrumental structure introduced by the Indian government to provide pension plan to people of India under parliamentary act of 2013. This scheme is directly controlled by the Pension fund regulatory and development authority.
The NPS is open to all the person who voluntarily want to invest in pension scheme, provided the age is between 18 – 60 years. The minimum investment limit set up by government of India under this scheme is Rs 500 per month or Rs 1000 per annum, however there is no upper limit to this scheme laid down by the government of India. Further this scheme provides a tax rebate of maximum Rs 50,000 under this scheme according to income tax act 80CCD (1B).
This is a national scheme introduced by the government for the people who looks forward to invest in a retirement plan. According to this scheme the money invested will be further vested in debt or equity market as per the preference of the policy holder. After retirement the policy holder can withdraw 60% of the money and the rest 40% will be invested to purchase annuity. However the matured 60% of the amount is not exempted from tax. The new pension scheme or national pension scheme provides a huge range of choices of investments to select from.
The difference between Atal Pension Yojna and National Pension Scheme.
| Atal Pension Yojna(APY) | National Pension Scheme(NPS) |
| Only for Indian resident | For both Indian resident and NRI’s |
| Age 18 – 40 | Age 18 – 60 |
| In case of Atal Pension Yojna (APY) a pensioner can choose between five different pension slabs (Rs.1000/-, Rs.2000/-, Rs.3000/-, Rs.4000/-, Rs.5000/-) per month. | In regard to the National Pension Scheme (NPS), 50% of the corpus is granted to the subscriber at the time of retirement and the rest is given in form of monthly pension and the return is also decided on the Pension Fund Manager’s performance. |
| For the Atal Pension Yojna (APY), there is a guaranteed pension | For the National Pension Scheme (NPS), a pensioner has no guaranteed pension, but can choose how to invest their pension between the mix asset classes (Asset Class E, Asset Class C, Asset Class G) |
| In the Atal Pension Yojna (APY), a subscriber cannot make a withdrawal before the time of maturity. Only in cases such as death or disability can they make a premature withdrawal | In National Pension Scheme (NPS), the option of a premature withdrawal is available to Tier II account holders and for tier 1 only 20% after investing the rest 80% in IRDA certified financial institute annuity |
| Atal Pension Yojna (APY) has only one account | National Pension Scheme (NPS) has two types of accounts – Tier I and Tier II |
| For the Atal Pension Yojna (APY), for an account that has been opened on or before 31 December, 2015 – and held for five years, the government makes a contribution of 50% or Rs.1000, whichever is lower | For the National Pension Scheme (NPS), the government does not make any contribution |
| Atal Pension Yojna (APY) has no option to select a Pension Fund Manager | National Pension Scheme (NPS) has eight Pension Fund Managers: SBI Pension Funds Pvt. Ltd., UTI Retirement Solutions Ltd, LIC Pension Fund Ltd, Kotak Mahindra Pension Fund Ltd., HDFC Pension Management Co.Ltd, ICICI Prudential Pension Fund Management Co. Ltd., Reliance Capital Pension Fund Ltd., Pension Fund by Birla Sunlife Insurance Co. Ltd |
| In Atal Pension Yojna (APY) there are no tax benefits | For National Pension Scheme (NPS) a subscriber can get a tax rebate upto Rs.2 lakh |
| In Atal Pension Yojna (APY), monthly pension contributions are automatically debited from the subscriber’s savings account | National Pension Scheme (NPS) subscribers can make their contributions using their “PRAN” Permanent Retirement Account Number card |
With the review of the difference between National Pension Scheme and Atal Pension Yojna we can surely conclude that National Pension Scheme is far more better pension scheme than Atal Pension Yojna, further more Atal Pension Yojna is directed towards the backward and the lower income segement of the society whereas National Pension Scheme is directed to all class of people in the country.
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