PRIME MINISTER VAYA VANDHANA SCHEME

PRIME MINISTER VAYA VANDHANA SCHEME (PMVVS)

Overview

PMVVS stands for Prime Minister Vaya Vandhana Scheme.
With the aim of providing long term, guaranteed and immediate pension exclusively to senior citizens, the scheme was launched on 04-May- 2017.
At that time, senior citizens were offered a time period of 1-year (till May-2018) to deposit in this scheme. Later in 2018, it was announced that senior citizens can deposit in this scheme till 31-March-2020. In May-2020, the government has announced that senior citizens can deposit in this scheme till 31-March-2023.

Key features

The scheme is offered by government of India which is exclusively for senior citizens (60-years or above). There is no upper limit on the age.
It is safe investment option that provides guaranteed and immediate pension. You can choose pension frequencies as per your choice.
The scheme is for the period of 10-years.

Work Process

Open an account and deposit a lump sum amount. The scheme is operated by LIC (Life insurance Corporation) of India where you can deposit through online at licindia.in or through offline at LIC offices.
Choose your pension frequency as per your choice (monthly, quarterly, half-yearly or yearly). You will receive pension on a regular basis for 10-years as per your chosen pension frequency.
Minimum & Maximum pension amount for various pension frequencies are:

Interest rate for monthly pension frequency is 7.40%, for quarterly- 7.45% and for half-yearly- 7.52% and for yearly 7.66%.

At the end of 10-years, you will get your deposit amount back if you are alive. If you die during 10-years, then the pension will be stopped immediately and your deposit amount will be given to your nominees or legal heirs.
The last date to deposit in this scheme is 31-March-2023.
Minimum & Maximum Deposit amount for various pension frequencies are:

Income Tax Benefit

No income tax benefit. The pension amount you receive is taxable.

Pre-mature closure

Allowed, you can leave this scheme in the middle of 10-years only in exceptional situations like you need money for treatment of critical diseases of yourself or your spouse. But there is penalty for leaving the scheme which is 2% of the deposit amount.
If you die during the term of 10-years, then the pension will be stopped and the entire deposit amount will be given back to your nominees or legal heirs. No exclusion of suicidal death.

Loan facility & Nomination

Available after completion of 3-years. The maximum loan amount you can get is 75% of the deposit amount.
Nomination facility is also available.

Free lock period

It is from 15-days from the date of receipt of the policy. If you deposit online, then it is 30-days.

Free lock means, if you are not happy with the scheme you can return the policy and get deposit money back.