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PMVVY for Senior Citizens Aged 60 Years & Above; Get Assured Rate of Return of 7.40% Per Annum

Chander Mohan
Chander Mohan

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) for senior citizens aged 60 years and above of Life Insurance Corporation of India (LIC) has started selling scheme. This pension scheme is non-linked and non-participating and will be available for investors till March 31, 2023. Financial advisors say that investors should look at this scheme as it offers attractive returns for a longer duration. 

According to LIC, this scheme has a policy term of 10 years and the pensioner can choose monthly, quarterly, half-yearly or yearly mode of pension. The scheme will provide an assured rate of return of 7.40 percent per annum in FY21. For investors investing this financial year will get 7.40 percent per annum payable monthly for the entire duration of ten years. 

“For the policies sold during the next two financial years, the applicable assured rate of interest, at which the pension payment shall be made, will be reviewed and decided at the beginning of each financial year by the finance ministry,” said LIC in its release. 

The scheme can be purchased by payment of a lump-sum purchase price. The pensioner has an option to choose either the amount of pension or the purchase price. For example, the minimum purchase price for monthly mode is Rs 1,62,162 and for yearly mode Rs 1,56,658. The maximum pension one can get under this scheme will be Rs 9,250 per month and Rs 1,11,000 per year.

Suresh Sadagopan, the founder of Ladder7 Financial Advisories, says, “This product offers credible income stream for senior citizen for longer duration. While the Senior Citizen Saving Scheme (SCSS) has a tenor of five years and can be extended for another three years, PMVVY has a policy term for 10 years and gives 7.4 percent per annum. For an investor who wants income certainty for ten years, this is a very good product.” 

The total amount of purchase price under all the policies under this plan and all the policies taken under earlier versions of PMVVY allowed to a senior citizen shall not exceed Rs 15 lakh, said LIC. This scheme was earlier launched in 2017, and recently, the government extended the scheme till March 31, 2023. 

This scheme can be purchased offline as well as online from LIC. Financial planners say that since pension received are taxed at the hand of investors, this product from LIC is advisable for someone who is in a lower tax bracket. 

In addition to the above according to Press Trust of India (PTI), The mutual fund industry has added nearly seven lakh investor accounts in April, taking the total folio tally to 9.04 crore, amid volatility in broader markets. This is the 71st consecutive month witnessing a rise in the numbers of folios, according to data from the Association of Mutual Funds in India. 

According to data, the number of folios with 44 fund houses rose to 9,04,28,589 at the end of April, from 8,97,46,051 in the end of March, registering a gain of 6,82,538 folios. 

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