BANKING AFFAIRS

Detailed explanation-1: -The Pradhan Mantri Vaya Vandana Yojana scheme provides for an assured return of 7.4% percent per annum payable monthly (equivalent to 7.66% per annum) for 10 years. The PMVVY scheme comes with policy term of 10 years and the maximum investment permitted under the scheme is Rs. 15 lakh.

Detailed explanation-2: -Loan Benefits Under the PM Vaya Vandana Yojana, policyholders can get up to 75% of the deposit as loan amount after completing three years from the date of purchase. As per the policy document, the applicable interest rate is 9.5% per annum for the loan sanctioned till Apr. 30, 2021.

Detailed explanation-3: -Consequently, at least till the PMVVY investment matures (10 years), the senior citizen would be able to earn a return on an investment of Rs 15 lakh in Pradhan Mantri Vaya Vandana Yojana and Rs 30 lakh in the SCSS, i.e., on a total of Rs 45 lakh.

Detailed explanation-4: -PMVVY is an insurance policy-cum-pension scheme that provides security to senior citizens. This pension plan is provided by Life Insurance Corporation (LIC) which caters to one’s need for post-retirement financial planning.