Pradhan Mantri Vaya Vandana Yojana (PMVVY)

PMVVY offers senior citizens fixed returns for 10 years, death benefits, loans, and a Rs. 15 lakh investment cap.
OPEN FD
PMVVY
OPEN FD
3 mins read
10-December-2024

Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a government-backed pension scheme specifically designed for senior citizens to provide with a reliable source of income. Managed by the Life Insurance Corporation (LIC), this plan is essential for post-retirement financial planning.

Initially launched on May 4th, 2017, and set to conclude on March 31st, 2020, the government has recently prolonged the duration of the PMVVY scheme for an additional three years, extending its availability until March 31st, 2023.

Pro tip

Bajaj Finance launches a new variant, "FD Max", for investments upto Rs. 25,000 . Bajaj Finance is providing one of the highest interest rates of up to 8.85% p.a.for senior citizens and 8.60% p.a. for non-senior citizens , in this variant.

systematic-deposit-plan-pro-tip-banner

The PMVVY provides a valuable security net. Remember, it's wise to explore different investment options for retirement. Fixed deposit (FD) offer guaranteed returns and flexible tenures, allowing you to tailor your investments alongside the PMVVY or other pension schemes.

Benefits of PMVVY yojana

Here are some key benefits of the PMVVY:

  1. Rate of Return: The PMVVY scheme offers an assured return of 7% to 9% per annum for a 10-year term. The interest rate is adjusted annually to align with the Senior Citizens' Savings Scheme (SCSS).
  2. Maturity Benefit: At the end of the 10-year term, the entire purchase price, along with the final pension payment, is returned to the policyholder.
  3. Pension Payment: Pension payments are made periodically, as chosen by the policyholder (monthly, quarterly, half-yearly, or annually) throughout the 10-year term.
  4. Death Benefit: In the event of the policyholder's death during the policy term, the beneficiary receives the full purchase price.
  5. Loan Facility: After three years, policyholders can avail a loan of up to 75% of the purchase price. Interest is charged on the loan amount, which is deducted from future pension payments.
  6. Surrender Value: Under exceptional circumstances, such as critical illness, the policyholder can surrender the policy. A surrender value of 98% of the purchase price is payable.
  7. Free Look Period: If dissatisfied with the PMVVY scheme, policyholders have 15 days (30 days for online purchases) to return the policy for a full refund, minus any stamp duty and pension payments.
  8. Suicide Clause: In the unfortunate event of suicide, the full purchase price is returned to the nominee.

The maximum and minimum pension provided under the PMVVY

Pension frequency

Minimum pension

Maximum pension

Monthly

Rs. 1,000

Rs. 9,250

Quarterly

Rs. 3,000

Rs. 27,750

Half-Yearly

Rs. 6,000

Rs. 55,500

Annually

Rs. 12,000

Rs. 1,11,000


How to apply for Pradhan Mantri Vaya Vandana Yojana (PMVVY)?

Here are the two ways to subscribe to the PMVVY scheme:

Online Procedure

  1. Visit the official LIC website.
  2. Navigate to the ‘Buy Online Policies’ section.
  3. Select the ‘Pradhan Mantri Vaya Vandana Yojana’ option.
  4. Click on the ‘Click to Buy Online’ button.
  5. Provide your contact details and proceed.
  6. Complete the online application form.
  7. Upload the required documents.
  8. Submit the application to complete the registration process.

Offline Procedure

  1. Obtain a PMVVY application form from any LIC branch. (A sample form is available here.)
  2. Fill out the form accurately.
  3. Submit the completed form along with the necessary documents to the LIC branch.
  4. After document verification, an LIC agent will initiate the policy.

Explore Life Insurance policies

Life insurance policies designed for savings and investments offer the dual advantage of increasing your savings while providing life coverage. These plans include features such as flexible premium payments, maturity benefits, tax exemptions, and more.

If you are looking for affordable life insurance policies to boost your savings strategy, visit Bajaj Finance Insurance Mall. Collaborating with leading insurers, Bajaj Finance simplifies finding the right policy for you. Use this easy-to-navigate platform to compare, select, and secure your financial future with affordable premiums.

Maximum and minimum purchase and pension price

This table summarises the pension payouts offered under the Pradhan Mantri Vaya Vandana Yojana scheme based on the investment amount and chosen payment frequency.

Mode of Pension Payment

Minimum Purchase Price (Investment in Rs.)

Minimum Pension (in Rs.)

Maximum Purchase Price (Investment in Rs.)

Maximum Pension (in Rs.)

Monthly

1,62,162

1,000

15,00,000

9,250

Quarterly

1,61,074

3,000

14,89,933

27,750

Half-Yearly

1,59,574

6,000

14,76,064

55,500

Yearly

1,56,658

12,000

14,49,086

1,11,000

 

Important points

  • Investment amount determines the pension payout.
  • Higher investment leads to a higher monthly pension.
  • Choose the payout frequency that best suits your financial needs

Taxability provisions of PMVVY scheme

  • Investment: Contributions made to PMVVY are not eligible for a tax deduction under Section 80C of the Income Tax Act.
  • Returns: The interest earned on PMVVY investments is taxable as per the applicable income tax bracket.
  • Tax Deduction at Source (TDS): TDS applies to the pension received from PMVVY.
  • GST: PMVVY investments are exempt from Goods and Services Tax (GST).

How to check PMVVY policy details

Policyholders can access their PMVVY policy details through the Umang App:

  1. Navigate to the PMVVY section within the Umang App
  2. Locate the "Policy Basic Details" section and click "Open"
  3. Choose the preferred login method: MPIN or OTP
  4. Enter your mobile number and the chosen login credential (MPIN/OTP)
  5. Under "General Services," select "Policy Basic Details"
  6. Provide your policy number and mobile number, then click "View Details"
  7. Your policy information will be displayed

Eligibility criteria for PMVVY

To be eligible for the PMVVY scheme, you must:

  • Age: Be 60 years or older.
  • Citizenship: Be an Indian citizen.

Policy Term:

  • The policy term for PMVVY is 10 years.

Pension Options:

You can choose from the following pension options:

Minimum Pension:

  • ₹1,000 per month
  • ₹3,000 per quarter
  • ₹6,000 per half-year
  • ₹12,000 per year

Maximum Pension:

  • ₹9,250 per month
  • ₹27,750 per quarter
  • ₹55,500 per half-year
  • ₹1,11,000 per year

Maximum Purchase Price:

The maximum purchase price for the PMVVY scheme is ₹15 lakh.

Documents required to apply for Pradhan Mantri Vaya Vandana Yojana (PMVVY)

  • Bank account details
  • Aadhaar card
  • PAN card
  • Address proof
  • Age proof
  • Passport size photo
  • Proof of retirement from employment

Additional read: PM-Kisan Samman Nidhi Yojana

Contact details for inquiries regarding the PMVVY policy

  • Phone: 022-67819281 or 022-67819290 (Monday to Friday, 10:00 AM to 5:30 PM IST)
  • Email: onlinedmc@licindia.com

Please note: These contact details are specific to PMVVY policy inquiries.

Investment considerations

The PMVVY scheme offers a guaranteed pension option for eligible senior citizens. It can be a valuable tool for retirement planning. However, a significant initial investment is required to participate.

Conclusion

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) offers a compelling option for senior citizens seeking safe and reliable retirement income. With its guaranteed returns, flexible pay-out options, and government backing, PMVVY is a valuable tool for securing your financial future.

Fixed deposits offer a familiar and reliable investment option for senior citizens seeking steady income. Consider incorporating them into your retirement portfolio alongside schemes like PMVVY for diversification. Bajaj Finance offers one of the highest interest rates, up to 8.85% p.a., on their FD. Additionally, Bajaj Finance FDs are AAA rated, ensuring the highest level of safety.

Calculate your expected investment returns with the help of our investment calculators

Investment Calculator

FD Calculator

Sukanya Samriddhi Yojana Calculator

PPF Calculator

Recurring Deposit Calculator

Provident Fund Calculator

Gratuity Calculator


Also read below articles related to government schemes

Frequently asked questions

What is the investment limit in PMVVY?

The maximum investment limit in Pradhan Mantri Vaya Vandana Yojana (PMVVY) is Rs. 15 lakh per individual. This means you can invest up to Rs. 15 lakh, but a couple cannot combine their limits for a joint investment.

Is PM Vaya Vandana Yojana taxable income?

Yes, the interest earned on your PMVVY investment is taxable according to your income tax slab. There's no tax exemption on this income. However, if the total interest you earn in a financial year is less than Rs. 50,000, no tax is deducted at source (TDS) is applied.

Can husband and wife both invest in PMVVY?

Yes, both husband and wife can invest in PM Vaya Vandana Yojana (PMVVY) individually. Each person can invest up to the maximum limit of Rs. 15 lakh, potentially maximising their total returns.

Is PMVVY eligible for 80C deduction?

No, PM Vaya Vandana Yojana (PMVVY) does not qualify for a deduction under Section 80C of the Income Tax Act. This section covers tax-saving investments like PPF, ELSS mutual funds, and ULIPs.

What is the age limit for the PM Vaya Vandana scheme?

The PM Vaya Vandana Yojana (PMVVY) is only available for senior citizens in India. The minimum age limit for investment is 60 years old. There's no upper age limit for investing in this scheme.

Is premature withdrawal allowed in PMVVY?

Generally, PMVVY does not allow early withdrawal of your funds. However, exceptions exist for emergencies. You can withdraw prematurely if you or your spouse experience a critical illness or require hospitalisation. In such cases, a penalty will be applied to the withdrawn amount.

Can I invest Rs. 30 lakhs in PMVVY?

No, you cannot invest Rs. 30 lakhs in PMVVY. The maximum investment limit for PMVVY is Rs. 15 lakhs.

Is TDS deducted in PMVVY?

No, Tax Deducted at Source (TDS) is not deducted on the pension amount received under PMVVY. However, the interest earned is taxable under your income tax slab.

Is LIC Vaya Vandana Yojana taxable?

PMVVY is not a tax-saving scheme. The pension received is considered income and taxed according to your income tax bracket. There's no tax benefit on the investment amount either.

What is the lock-in period for PM Vaya Vandana Yojana?

PMVVY has a lock-in period of 10 years. You cannot withdraw your investment amount during this period. However, after three years, you can avail a loan up to 75% of the purchase price

What is the interest rate of Pradhan Mantri Vaya Vandana Yojana?

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) offers an interest rate of 7.40% per annum, payable monthly for the current financial year. The rate is subject to periodic revision by the government.

Is PMVVY tax-free?

No, the income received from PMVVY is not tax-free. The pension amount is fully taxable as per the individual's applicable tax slab, though the investment in the scheme does not qualify for tax deductions under Section 80C.

Is it safe to invest in PMVVY?

Yes, PMVVY is considered a safe investment as it is backed by the Government of India. It offers guaranteed returns, making it a secure option for senior citizens seeking steady post-retirement income.

What is the PMVVY scheme?

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a pension scheme offered by the Life Insurance Corporation of India (LIC) specifically designed for senior citizens. It provides a guaranteed return and a regular income stream, making it a popular choice for post-retirement financial planning.

What is the disadvantage of PMVVY?

One of the main drawbacks of PMVVY is the 2% penalty imposed on premature withdrawal. Additionally, the scheme has been discontinued for new subscribers as of March 2023.

Is TDS deducted on PMVVY?

Yes, the interest earned on your PMVVY investment is taxable. If the annual interest exceeds Rs. 50,000, TDS will be deducted at source.

Can I apply for PMVVY online?

Yes, you can apply for PMVVY both online through the LIC website and offline at a LIC branch.

How do I register for PMVVY online?

You can register for PMVVY online by visiting the LIC website, navigating to the 'Buy Online Policies' section, and selecting the PMVVY option. Follow the on-screen instructions to complete the application process.

Show More Show Less

Related videos

Bajaj Finserv app for all your financial needs and goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-approved limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

GET THE APP

Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.