APY is the government's pension scheme for the unorganised sector — people who do not have access to employer-provided pension like EPF. If you are between 18 and 40 and do not have formal pension coverage, APY guarantees a fixed monthly pension of ₹1,000, ₹2,000, ₹3,000, ₹4,000, or ₹5,000 starting from age 60 until death. After the subscriber passes away, the spouse receives the same pension. After both pass, the nominee gets the accumulated corpus.
The monthly contribution depends on two things — the pension amount you choose and the age at which you join. The earlier you join, the less you pay each month. Here are some examples for the ₹5,000/month pension option:
| Joining Age | Monthly Contribution | Total Paid till 60 |
|---|---|---|
| 18 years | ₹210 | ₹1,05,840 |
| 25 years | ₹376 | ₹1,57,920 |
| 30 years | ₹577 | ₹2,07,720 |
| 35 years | ₹902 | ₹2,70,600 |
| 40 years | ₹1,454 | ₹3,48,960 |
The difference is dramatic — joining at 18 versus 40 means paying ₹210 versus ₹1,454 per month for the same ₹5,000 pension. This alone should convince young workers in shops, farms, and small businesses to enrol early.
Since October 2022, income tax payers (anyone who has filed an IT return) are not eligible to join APY. This was a controversial change — it effectively limited APY to lower-income workers. Existing subscribers who later become taxpayers are not affected; they can continue their APY account.
You can enrol through any bank where you have a savings account. Most banks offer online APY registration through their net banking or mobile apps. You need Aadhaar linked to your bank account and a mobile number. The monthly contribution is auto-debited from your savings account — if there is insufficient balance, the bank charges a penalty of ₹1-10 per month depending on the contribution amount.