Buying Pradhan Mantri Vaya Vandana Yojana (PMVVY) will provide a fixed monthly pension for ten years. The scheme is exclusively available with LIC of India. The last date for PMVVY investment stands at March 31, 2023. However, the guaranteed pension rates for policies sold during the next FY will be reviewed and decided at the beginning of next FY year.
“For Financial Year 2021-22, the Scheme shall provide an assured pension of 7.40% per annum payable monthly. This assured rate of pension shall be payable for the full policy term of 10 years for all the policies purchased till 31st March, 2022” – is what the LIC website shows.
The rate contracted at the time of purchase of the policy will remain the same for the entire 10 years policy term. The Scheme shall continue to provide assured pension of 7.40% p.a. payable monthly (i.e equivalent to 7.66% p.a.) for Financial Year 2021-22 also. This assured rate of pension shall be payable for the full policy term of 10 years for all the policies purchased till 31st March, 2022.
The pension will, therefore, remain fixed for 10 years at the rate declared for that FY. Currently, most leading banks are offering interest rates of around 6.5 per cent on their FD schemes over 1 to 10-year tenure. In PMVVY, depending on the pension option of yearly, half-yearly, quarterly or monthly, the PMVVY interest rate will vary between 7.4 per cent and 7.6 per cent per annum.
PMVVY is a one-time lumpsum investment scheme for 10 years with an option to receive a regular income either monthly, quarterly, half-yearly or annually, in the form of pension. The amount that one invests as lump sum is called the purchase price.
The maximum investment allowed in PMVVY is Rs 15 lakh under monthly pension option while the maximum pension will be Rs 9250 per month. This means if both spouses are above age 60, total investment can be Rs 30 lakh and the family can receive a monthly pension of Rs 18500 per month for 10 years.
PMVVY is exclusively available to those who are 60 years of age and above. The PMVVY is a pension scheme for senior citizens that comes with guaranteed returns on monthly, quarterly, half-yearly or on an annual basis for a period of 10 years. As an investor, you can decide on the basis of the pension amount that you want or the purchase price that you want to invest in PMVVY.