Skip to main content

Varishtha Pension Bima Yojana


Under the scheme, the difference between the effective yield paid to the pensioner, and that earned by LIC, is compensated as subsidy to LIC by the government


The Cabinet gave its approval to Varishtha Pension Bima Yojana (VPBY), 2017 last week. The scheme will be implemented through Life Insurance Corporation of India (LIC), and aims to provide social security to senior citizens. It will give an assured pension, offering an 8% per annum guaranteed rate of return for 10 years, with an option for pension on a monthly, quarterly, half-yearly or annual basis.


What is Varishtha Pension Bima Yojana (VPBY)?
VPBY was first introduced as a pension scheme by the National Democratic Alliance (NDA) government for senior citizens, aged 55 years and above, in July 2003 but was withdrawn a year later. Current finance minister Arun Jaitley re-announced this scheme in the 2014-15 budget. The scheme remained open for subscription between August 2014 and August 2015. The scheme offered annuities in monthly, quarterly, half-yearly and annual modes, varying, between Rs500 and Rs5,000 (monthly), Rs1,500 and Rs 15,000 (quarterly), Rs 3,000 and Rs 30,000 (half-yearly) and Rs 6,000 and Rs 60,000 (annually). Maximum purchase price was Rs 6,66,665. The scheme offered an assured return of 9% on monthly payment basis, which amounted to annualized return of 9.38%.


Under the scheme, the difference between the effective yield paid to the pensioner, and that earned by LIC, is compensated as subsidy to LIC by the government. While the recently approved VPBY 2017 is providing a lesser return-8% per annum- given the current falling interest rate regime, experts believe that it is a good offering.


The purpose of VPBY 2017 is to help those citizens who rely on interest income from their retirement savings to cope with lower interest rate environment. The 8% interest is competitive given very low, even negative in some cases, interest rate environment globally. The interest rate on monthly income scheme of post offices is 7.7%, which, too, can come down further if there is further decline in the yields on government bonds.


Under the new scheme, the fixed interest rate commitment is of 10 years, which has faced some criticism. A 10-year duration is reasonable and indeed a sign of good design". The macroeconomic environment may change over time, and sunset clauses are needed in all such schemes, so that a fresh view can be taken at the time of sunset.


Other details of the scheme are awaited. Like the earlier scheme, it is expected that the maximum pension ceiling will apply to the whole family, i.e., total amount of pension under all the policies issued to a family under this plan shall not exceed the maximum pension limit. The family, for this purpose, will comprise the pensioner, his or her spouse and dependants.






------------------------------------
Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds

Top 4 Tax Saver Mutual Funds for 2017 - 2018

Best 4 ELSS Mutual Funds to invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Invesco India Tax Plan

3. Tata India Tax Savings Fund

4. BNP Paribas Long Term Equity Fund



Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms


For further information contact SaveTaxGetRich on 94 8300 8300

------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

OR

Call us on 94 8300 8300

------------------------------------


 

Popular posts from this blog

Mutual Fund Review: Taurus Tax Shield

    Taurus Tax Shield has seen a turnaround in performance since 2007, but still remains a volatile offering… The fund has seen a turnaround in its performance since 2007 and has delivered impressively during market rallies since then. The portfolio is also more diversified. It contained its downfall to an average level in 2008 but is still one of the most volatile offerings in this category. Bold investors can look at this fund.   Strategy The fund manager invests across the market capitalisation and sectors. The selection of stocks is made on the basis of long-term business prospects and value creation. Fund Insight Launched in March 1996, the fund was a laggard with just two annual outperformances. Concentrated stock bets and high exposure to mid and small caps led to it being hit harder during market downturns. The number of stocks in the portfolio never exceeded 20 and it was not rare to see the top 5 holdings account for around 60 per cent of the portfolio. After b...
Read more

AXIS Long Term Equity Fund - The Best Tax Saver Fund for 2016

  AXIS Long Term Equity Fund - Invest Online   History:   The open ended mutual fund was launched on December 21 in the year 2009. It is benchmarked against BSE 200 and managed by the fund manager JINESH GOPANI. Initially the scheme was called as Axis tax saver fund but later it was renamed as Axis long term equity fund with effect from September 2, 2011. Nature of investment: As far as asset allocation is concerned, 97.52% of the stocks are equity and 0.02% is debt based. The primary focus of the fund is to invest in diversified equity stocks that have higher growth potential. Total asset size of the fund is in the tune of 4,996 CRORE as of June 30, 2015. Performance: The performance of the fund for one year, 3 years and 5 years are 23.6%, 29.9% and 19.1 respectively which are far greater than 6.4%, 14% and 5.6% benchmark figures. It has also preformed fairly well against SBI magnum Tax Gain (G) and HDFC tax saver (G). The growth comparison is enumerated below;                        ...
Read more

10 year NSC launched, all set to give 8.7 per cent

Invest in Mutual Funds Online Download Mutual Fund Application Forms THE government introduced a 10-year National Savings Certificate ( NSC ), which will earn an interest rate of 8.7 per cent per annum. The notification for the launch of the new savings instrument, 10-year National Savings Certificate (IX-Issue), 2011, has been issued, an official statement said. The scheme will come into effect from December 1, it added. Investments in NSC will earn interest at the rate of 8.7 per cent compounded semi-annually, it said, adding that on an investment of Rs 100, the depositor will get Rs 234.35 on maturity of the NSC. There is no upper limit for investment in the certificate, it added. The new scheme will give better returns along with tax benefit to savers. At present, the maturity period of NSC is six years and it qualifies for tax relief for investment up to Rs 1,00,000 under Section 80C. The decision to raise the maturity period of NSC has been taken on the b...
Read more

Health insurance guide - Part I

Insurance, by definition, is morbid. What if I die suddenly? What if my home caught fire? What if I had to undergo expensive medical treatment? What if something that I thought happened only to others befell me? Insurers, who work with large samples, calculate the probability of such an event and, hence, the possibility of them having to pay out a sum of money to mitigate, to the extent possible, the effects of that disaster. However, the possibility of you undergoing some kind of expensive medical treatment during your lifetime is far more likely than you dying suddenly or your house burning down. Given that costs at private healthcare facilities, where you are most likely to land up, is high, and, doubling every four years 10 months or so, the rest of your money life could easily go out of whack if you had to incur such expenses. Just 12 per cent of India's population is covered with some sort of health insurance. Pared to the bone, for a comparatively small price, health insu...
Read more

IDFC Classic Equity Fund

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   IDFC Classic Equity Fund IDFC Classic Equity is a large-cap equity fund which currently has assets under management worth Rs. 158.52 crore. It was launched in August 2005. The fund is benchmarked against the BSE-200 Index. Performance YTD 1-Year 3-Year 5-Year Since Inception IDFC Classic Equity 0.93 26.61 6.30 1.01 11.65 BSE 200 1.52 17.31 6.00 1.99 12.98 All figures in % as on January 31, 2013; Returns above one-year in CAGR terms ...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now