PMVVY pension scheme: This important feature is due for reset on April 1

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If you are a retiree or are retiring soon and planning to invest in Pradhan Mantri Vaya Vandana Yojana (PMVVY), then it is important to note that the interest rate on the scheme is due for reset on April 1, 2022. As per the modified version of the scheme announced back in 2020, the scheme’s interest rate will be reset every year and will be in line with revised interest rate being offered for the Senior Citizens Saving Scheme (SCSS). This means that any change announced by the government in SCSS on March 31, 2022 will impact the interest rate earned on the PMVVY as well.

As per the release issued by the government on May 20, 2020, “To allow initially an assured rate of return of 7.40 % per annum for the year 2020-21 per annum and thereafter to be reset every year. Annual reset of assured rate of interest with effect from April 1st of financial year in line with revised rate of returns of Senior Citizens Saving Scheme (SCSS) up to a ceiling of 7.75% with fresh appraisal of the scheme on breach of this threshold at any point.”

Another thing to note is that the coming financial year is the last year to invest in PMVVY. The last date to invest in PMVVY is March 31, 2023. The scheme is scheduled to end on that date as per the original notification of the scheme.

Current interest rate on PMVVY

Currently, the interest rate offered on PMVVY is 7.4% per annum. The interest rate has been kept unchanged since FY 2020-21. This is because no change in the interest rate of SCSS has been announced since then.

What is PMVVY scheme?

PMVVY was announced by the Prime Minister Narendra Modi. The scheme was officially launched in May 2017. Since then, the scheme has been extended. Earlier the scheme used to offer 8%. However, due to low interest rate regime, the interest rate on the scheme was modified in May 2020.

PMVVY is a pension scheme where pension is paid depending on the pay-out option chosen by the individual at the time of investing in the scheme. Pension can be received on monthly quarterly, half-yearly and yearly basis.

Depending on the option chosen, the pension begins from the end of chosen period. This means that if you opt for yearly pension mode, then pension will be received by you after the end of first year.

Who can invest in PMVVY?

A senior citizen who has completed 60 years of age can invest in this scheme. There is no restriction on the maximum age.

Duration of PMVVY

The term of PMVVY scheme is 10 years. At the end of 10 years, the amount invested will be paid back to the senior citizen.

Minimum and Maximum amount one can invest in PMVVY

Senior citizens can invest a minimum amount of Rs 1,56,58 and a maximum amount of Rs 15 lakh in the scheme. Do note that the minimum and maximum amount depends on the option chosen to receive the pension.

Mode of Pension Minimum Investment amount (Rs) Maximum Investment amount (Rs)
Monthly 1,62,162 15,00,000
Quarterly 1,61,074 14,89,933
Half-yearly 1,59,574 14,76,064
Yearly 1,56,658 14,49,086

Source: LIC India


Minimum and Maximum pension amount

The minimum and maximum pension amount that a senior citizen will receive depends on the amount invested. The scheme offers minimum pension of Rs 1000 per month and maximum pension of Rs 1,11,000 per annum.

Mode of Pension Minimum pension amount (Rs) Maximum pension amount (Rs)
Monthly 1,000 9,250
Quarterly 3,000 27,750
Half-yearly 6,000 55,500
Yearly 12,000 1,11,000

Source: LIC India


The pension will be paid to senior citizen via NEFT or Aadhaar Enabled Payment System.

Returns earned from PMVVY

The return offered by the pension scheme depends on the pension frequency chosen by the senior citizen. The return ranges between 7.40% per annum for monthly pension to 7.66% per annum for yearly pension.


How to invest in PMVVY


PMVVY is offered by Life Insurance Corporation of India (LIC). To invest in PMVVY, one can visit his/her nearest LIC branch office. One should also carry his/her photograph, KYC documents such as PAN and Aadhaar along with the cheque for making investment. Senior citizen can also invest via LIC India website.

As per LIC India website, Aadhaar number is mandatorily required as scheme is subsidised by the government of India.

Premature exit from PMVVY

Senior citizens can prematurely exit the scheme subject to certain conditions. This exit is allowed under exceptional circumstances such as if money is needed for treatment of critical/terminal illness of self or spouse. In such a scenario, a senior citizen will get 98% of the purchase value back.

Other benefits of Scheme

Loan facility is available after completion of three policy years. A senior citizen can take maximum loan of 75% of purchase price. The interest rate charged on loan amount shall be reviewed and determined at periodic intervals. The loan interest will be recovered from the pension amount payable under the scheme.

On death of senior citizen during the scheme term, the investment amount will be paid to the beneficiary.



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