GOVT EMPOWERS SENIOR CITIZENS WITH MORE POWER TO INVEST

Senior citizens have more reason to rejoice as they can now invest more in the Pradhan Mantri Vaya Vandana Yojana (PMVVY).

The scheme was available for investment since 4 May 2017. It aims to provide regular pension to senior citizens — aged 60 years or more. There is no maximum age for entry. The scheme was earlier open for investment till May 3, 2018, which has now been proposed in the Budget to remain open for investment till March 2020. Apart from extension in the investment date, existing limit on investment of ₹7.5 lakh per senior citizen under this scheme is also being enhanced to ₹15 lakh. So a couple, both senior citizens, can invest up to ₹15 lakh separately, or maximum ₹30 lakh putting together in the scheme.

The scheme can be purchased offline as well as online, through Life Insurance Corporation of India (LIC), which has been given the sole rights to operate it. The scheme provides an assured return of 8% to 8.30% per annum, depending on whether you choose to get your pensions on a monthly, quarterly, half-yearly or yearly basis. For the monthly option, the return is 8% and it is 8.30% for the annual option. If a pensioner survives the policy term (10 years), purchase price along with final pension instalment shall be payable. The scheme also allows premature exit or withdrawal for treatment of any critical or terminal illness of self or spouse. On premature exit, 98% of the purchase price shall be refunded. On death of the pensioner during the policy term of 10 years, the purchase price shall be paid to the beneficiary.

While earlier the maximum pension that an investor would have earned per month under the scheme was ₹5,000 — or ₹60,000 a year—it will now increase to up to ₹10,000 a month or ₹1.2 lakh a year. The scheme is at par with other schemes for senior citizens such as Senior Citizens Savings Scheme, which offers a similar return of 8.3% per annum currently. Given that both schemes will have a cap of ₹15 lakh each, senior citizens can consider dividing their retirement corpus and invest in these schemes. In the current falling interest rate scenario, fixed 8.3% annual return is a good option.

NEW DELHI: