LIC best pension scheme: There are numerous schemes available for senior citizens currently either be fixed deposits, post office saving schemes, tax-free bonds, or other capital market instruments. Nowadays, senior citizens can shop through their desirable saving schemes that offer an attractive rate of returns and ensures maximum security and accordingly park their hard-earned money for a specific tenure.
Unlike these deposits scheme, there is one particular scheme that provides a pension after a lumpsum amount invested for a certain period of time. This would be LIC-led Pradhan Mantri Vaya Vandana Yojana (PMVVY) which provides a fixed monthly pension for 10 years. PMVVY is a pension scheme for senior citizens with a minimum age of 60 years.
There is no maximum limit on elderly age. The scheme has a policy term of 10 years with a minimum pension of Rs 1,000 to maximum of Rs 9,250 per month for the entire term. The scheme is available for investment till March 31, 2023. However, LIC is offering a guaranteed 7.4% per annum for financial year FY22 on this scheme for 10 years if purchased before March 31, 2022.
On its website, LIC says, “For Financial Year 2021-22, the Scheme shall provide an assured pension of 7.40% p.a. 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.” The largest insurer in India, LIC is the sole authorizer to operate this scheme.
The scheme can be purchased with payment of a lumpsum amount. However, a pensioner will have a choice to either select the amount of pension or the purchase price. A maximum amount of Rs 15 lakh can be invested in this scheme. That means if an elderly spouse plans to opt for the scheme then both can invest up to Rs 30 lakh and earn a fixed monthly pension of about Rs 18500 for 10 years in one family.
The maximum pension plan in the scheme is Rs9,250 per month, Rs 27,750 per quarter, Rs 55,500 per half-year; and Rs 1,11,000 per year. Under the scheme, the first installment of pension is payable after 1 year, 6 months, 3 months, or 1 month from the date of purchase of the same depending on the mode of pension payment i.e. yearly, half-yearly, quarterly or monthly respectively.
Similarly, depending upon the different modes of pension payments, the scheme will offer from 7.4% to a maximum 7.66% interest rate per annum. For instance, a senior citizen can earn a 7.4% rate on monthly instalments, while the interest rate is 7.45% and 7.52% on quarterly and half-yearly instalments. Further, for yearly instalments, the scheme offers 7.66% per annum.
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PMVVY interest rate is better than compared to many bank fixed deposits and also post-office saving schemes. The government-owned Senior Citizen Savings Scheme (SCSS) gives a 7.4% interest rate, while SBI gives a 6.30% interest rate to senior citizens on their FDs below ₹2 crore on 5 years to 10 years tenor. Also, ICICI Bank and HDFC Bank offer a 6.35% interest rate to senior citizens on 5 years 1 day to 10 years tenure.
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