# Can one open both APY and NPS accounts?

Saving money for retirement is a necessary step for every individual. For this purpose, the government has extended two pension schemes namely, Atal Pension Yojana(APY) and National Pension Scheme (NPS). Here, you will briefly get to know about the two pension schemes and whether or not will you are allowed to have accounts in both the schemes.

# What is NPS?

The National Pension Scheme (NPS) is a voluntary retirement savings scheme that allows subscribers to make defined contributions to planned savings, thereby securing the future in the form of a pension. It is an attempt to find a long-term solution to the problem of providing adequate retirement income to every Indian citizen.

# What is APY?

The Atal Pension Yojana Scheme, also known as APY, is a retirement-oriented scheme that provides an assured pension to individuals with low income in the unorganised sector. This scheme can be invested in before the age of 40, and it will mature when the investor reaches the age of 60.

# Difference between APY and NPS

There are numerous differences between the two schemes based on various parameters.

1. AGE: Individuals can join the National Pension Scheme (NPS) at the age of 18, with a maximum age limit of 65.
The entry age for the Atal Pension Yojana (APY) is set at 18 years, with a maximum age limit of 40 years.

2. ELIGIBILITY CRITERIA: For the National Pension Scheme, all citizens can join no matter if they are a resident or a non-resident citizen.

   For Atal Pension Yojana, only Indian residents can make investments. They would need to possess a bank savings account or a post office savings account, to take        benefits of the scheme. 

   According to gazette notification issued by Ministry of Finance, a person paying income tax will not be eligible to join the scheme from October.

3. TYPE OF ACCOUNT: An individual can only have one account in his name under the Atal Pension Yojana Scheme.
In the case of NPS, an investor can choose between two types of accounts: Tier I and Tier II. The former is required, whereas the latter is optional for an investor.

4. INVESTMENT OPTION: A National Pension Scheme subscriber has the option of investing actively or automatically. They can also hire a fund manager to manage their funds.
The APY scheme, on the other hand, does not offer its subscribers an investment option.

5. GOVERNMENT CONTRIBUTION: There is no government contribution to an account for the National Pension System.
The government, on the other hand, contributes a specific amount to the account, subject to certain terms and conditions.

# Atal Pension Yojana scheme to close for income tax payers

From October 1, 2022, the government's Atal Pension Yojana (APY) social security scheme will no longer accept enrollments from income tax payers. According to the finance ministry, the goal is to better target pension benefits to underserved demographic groups.

"Provided that, as of October 1,2022, any citizen who is or has been an income-tax payer shall not be eligible to join APY," the notification states.

"For the purpose of this clause, the expression "income-tax payer" shall mean a person who is liable to pay income-tax in accordance with the Income Tax Act, 1961, as amended from time to time," according to the notification dated August 10, 2022.

# Can one open account in both APY and NPS schemes?

If you're wondering if you can invest in both APY and NPS, the answer depends on whether or not you're the country's "income tax payer." You cannot open an APY account if you are one.





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# Can one open both APY and NPS accounts?

Can one open both APY and NPS accounts?

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