Pradhan Mantri Vaya Vandana Yojana (PMVVY) 2023 - Interest Rate & Scheme

What is Pradhan Mantri Vaya Vandana Yojana?

The Pradhan Mantri Vaya Vandana Yojana, also known as PMVVY, is a scheme released by the Government of India. It is an insurance policy and pension-based scheme which aims to provide additional sources of income to the senior citizens of India. The Life Insurance Corporation manages the policy (LIC), and the Government of India supports the entire fund. 

The primary objective of the PMVVY scheme is to help the citizens of India manage their finances post-retirement. It gives them an avenue to diversify their sources of income after retirement so that they are not just dependent on the Provident fund and monthly pensions for managing their expenses. Also, a fund like the Pradhan Mantri Vaya Vandana Yojana protects senior citizens from the uncertainties of the market and the fluctuations in interest rates.

As the PM Vaya Vandana Yojana is a retirement scheme, only people above 60 can avail of it. Earlier, the policy had a time frame of around three years. It was available from 4th May 2017 to 31st March 2020. However, the period was recently extended to 31st March 2023 via a Government Press Release. 

When citizens invest in the Vaya Vandana Yojana scheme, they become eligible for regular payouts once for the next ten years from the day they invest in the scheme. As the PM Vaya Vandana Yojana is a Government based scheme, it provides a steady return at 7.4 per dent, which is better than most mutual funds and bank deposits. You can deposit a maximum of Rs. 15 lakhs to the scheme. The best thing about the PMVVY scheme is that you can apply for the scheme both online and offline. 

Features of the Pradhan Mantri Vaya Vandana Yojana

Before investing in the PMVVY scheme, you must be aware of the features of the scheme and what makes it different from all the other retirement schemes. Let’s look at some of the features of the PMVVY scheme.

Financial Security 

Most of the retired population in India depends on sources like Provident Funds, FDs, RDs, etc., for their retirement income. While these might give you a small income, they might not be enough to keep up with your regular expenses.

Therefore, all citizens need to build an additional source of income. An additional source will give you financial discipline, and you can manage all your expenses. Investing in the PM Vaya Vandana Yojana scheme creates a source of income that will pay a fixed amount for ten years.

Assured Returns

While investing in all kinds of securities is important, these investments come with risks. Hence, you are always surrounded by the fear of losing your money if the market fluctuates. The Vaya Vandana Yojana works differently compared to the other investment vehicles. LIC guarantees a return of 7.4% per annum on the money that you put in the scheme.

The interest rate is pre-decided for every year by LIC and the Government of India, and it says the same for the entire year. The annual change in the interest rate is known as the annual reset. 

Periodic Payouts

Under the PMVVY scheme, you can make regular payouts. You can select a payout cycle for your payments. You can select a payout option among monthly, quarterly, half-yearly and annual options. The option will depend on your financial requirements and other planned purchases that you might have in the pipeline.

Once you purchase the PMVVY scheme, you should withdraw your first payment. You must also select a mode for these payments. For instance, if you choose a monthly payout, you must receive the first payment within the next 30 days of the plan purchase date. Hence, the control of the payout is in your hands. 

Maturity Benefits 

The PM Vaya Vandana Yojana also involves the concept of maturity benefit. As per this benefit, the investor is eligible for a lump sum payout in addition to the amount of the last investment. You can avail of the benefit if you survive through the tenure of the policy, i.e., ten years. 

Death Benefits

An important feature of investing in the Pradhan Mantri Vaya Vandana Yojana is that the investor's beneficiary is eligible to bet the payouts if the investor dies. Once the beneficiary submits the required documents, they can access the entire corpus as a claim. 

Lock-in Period

The Pradhan Mantri Vaya Vandana Yojana scheme is one of the most flexible retirement schemes. If, as an investor, you purchase the PMVVY scheme and are not happy with the set of terms and conditions that governs the scheme, you can return it within 30 days of purchase. However, the 30 days period is only applicable if you buy the PMVVY online.

For offline purchases, the free period is 15 days. If you are not interested in continuing with the scheme, you will have to return it within the next 15 days from your date of purchase. You must state your reason for opting out of the scheme when you apply for a policy return.

Surrender Value

Financial emergencies can knock on you anytime. Also, you become much more prone to such emergencies with an increase in your age. Your PMVVY scheme can come in handy if you have an emergency. You can surrender the scheme if your spouse suffers from a critical illness. Once surrendered, you will receive about 98% of the purchase value of the scheme.

The 2% is deducted for the premature exit from the scheme. However, the Vaya Vandana Yojana allows you to liquidate the scheme and meet most of your expenses.

A Good Collateral

Once you get into the Pradhan Mantri Vaya Vandana Yojana, you can avail yourself of the different benefits of the scheme. If three years pass after the purchase date, you are eligible to get a loan against your Pradhan Mantri Vaya Vandana Yojana investment. 

Hence, you can take a loan against your PMVVY scheme if you need to fund some expenses. The scheme works as regular collateral. You are eligible to get a loan of up to 70% of the total purchase value of the scheme. Also, the loan's interest payments can be made through the pension payouts of the scheme. Hence, your loan gets managed quite effectively.

Other Exclusions

If due to some situations, the scheme holder commits suicide, the beneficiary of the scheme holder will be eligible for the entire purchase price of the scheme.

Eligibility Criteria for the PMVVY Scheme

If you are interested in applying to the Pradhan Mantri Vaya Vandana Yojana scheme, you must meet the eligibility criteria of LIC and the Government of India. Some of these criteria include the following:

  • The applicant must be at least 60 years old when they purchase the PMVVY scheme.
  • While there is a limit on the minimum age, there are no limits on the maximum age for the applicant
  • The person investing in the scheme must be a citizen of India
  • You must stick to the policy term of 10 years once you subscribe to it.

Once you purchase the PMVVY scheme, you can get a minimum pension of Rs. 1,000 per month and a maximum of Rs. 10,000 per month. The limits for other payout durations are:

Payout Cycle Minimum Amount (Rs.) Maximum Amount (Rs.)
Monthly 1,000 10,000
Quarterly 3,000 30,000
Half-Yearly 6,000 60,000
Yearly 12,000 1,20,000

Hence, as decided by LIC and the Government of India, you can’t withdraw money less than the minimum and more than the maximum limit. 

When you select the pension payout amount, you must consider your expenses, the size of the family, big-ticket purchases, etc., that you are most likely to make. Based on these factors, go with a monthly, quarterly or yearly payout. Also, you must consider the dependents before choosing an amount. The dependents, as per the policy, include your spouse, unmarried daughter or an unemployed son. The age lit for the children of the scheme holder is 25 years. 

Purchase Price Limits

Once you make the lump sum payment to purchase the Pradhan Mantri Vaya Vandana Yojana scheme, you need to select a payout mode for your payments. You can either opt for the purchase price or the pension amount when you opt-in for the PMVVY scheme.

The list below will show you the maximum and the minimum purchase price of the PMVVY scheme, along with its corresponding pension amount for all modes of pension. 

Pension Mode Maximum Purchase Price Pension Amount for Maximum Purchase Price Minimum Purchase Price Pension Amount for Minimum Purchase Price
Yearly 14,49,086 1,11,000 1,56,658 12,000
Half-Yearly 14,76,064 55,500 1,59,574 6,000
Quarterly 14,89,933 27,750 1,61,074 3,000
Monthly 15,00,000 9,250 1,62,162 1,000

Application Process 

You can apply for PMVVY online and offline. You need to visit the official website of the Life Insurance Corporation of India or visit their office, depending on the mode of application. Let’s look at both processes to understand them better. 


You must follow a few simple steps to purchase the Pradhan Mantri Vaya Vandana Yojana scheme. These steps include:

  • Visit the nearest LIC branch and collect a physical copy of the application form to apply to PMVVY
  • Now, fill in all your information. Ensure that you fill in all the mandatory sections first.
  • Once you fill in the form, you must attach copies of the required documents. Additionally, you will have to self-attest these copies.
  • You can either fill out the form in one go at the branch or return to the branch post filling it out. 


You can also apply for the PMVVY scheme online. This is much better as you don’t need to travel anywhere to apply to the scheme. You must also follow the steps to purchase the PM Vaya Vandana Yojana scheme.

  • Visit the official website of LIC India.
  • Click on the ‘Buy Policy Online’ option to begin your application process.
  • Now, select the Pradhan Mantri Vaya Vandana Yojana
  • A new tab will appear on the screen. You need to click the ‘Buy Online’ option to apply for the scheme online.
  • Create your Access ID and fill in all your basic details, like name, phone number, etc., for the generation of the Access ID.
  • You will get a unique combination of 9 digits as your Access ID
  • You can fill in the Access ID and then proceed with the process.
  • Post adding your Access ID; you must fill in the online application and upload all your documents to the portal.
  • Submit the form and make the payment. You must keep the policy and the acknowledgment number safely with you.

You can choose to apply both online as well as offline. You need to choose a payout cycle for the Vaya Vandana Yojana scheme. As the policy tenure begins, you will receive the    PMVVY scheme details.

Documents Required

When you apply for a PMVVY online or even offline, you must submit a set of documents. These documents are essential for the processing of the scheme application. 

  • Aadhar Card or any Government-accepted ID card
  • PAN Card
  • The bank details where the pensioner wants his pensions to be credited per the cycle.

Once you invest in the policy, you must check all the important dates related to the scheme, like the receipt date, risk commencement date, policy review dates, etc. This will help you ensure that you don’t miss any changes made in the scheme.

Taxes and Charges on Premature Exit

The taxes that individuals need to pay on their earnings from the Vaya Vandana Yojana scheme will depend on applying any statutory taxes by the Government. Also, if you decide to make a premature exit in case you or your spouse is not well, 2% of the total purchase price will be deducted as the charge for premature exit.


The Pradhan Mantri Vaya Vandana Yojana is one of the best retirement schemes. Hence, if you are looking for an additional source of income, you should consider purchasing this scheme. The best thing about the scheme is that it gives you an assured return and protects you from any financial imbalance. 

Frequent Asked Questions (FAQs) :

Q. What documents must you submit during the application process for the Pradhan Mantri Vaya Vandana Yojana scheme? 

You would need the following documents for your application process. These documents include the following:

  • Aadhar Card
  • Permanent Account Number or PAN Cards
  • Address Proof
  • A copy of the cheque leaf of your bank account where you want to receive the payments on time. 

Once these documents are verified, you can access the Pradhan Mantri Vaya Vandana Yojana scheme.

Q. Does the Pradhan Mantri Vaya Vandana Yojana scheme come with any tax benefits?

No tax benefits are applicable in the Pradhan Mantri Vaya Vandana Yojana case.

Q. What are the different ways I can apply to the Pradhan Mantri Vaya Vandana Yojana scheme?

You can apply for the scheme online by visiting the official website of Life Insurance Corporation. Also, you can visit their office and collect the form for their scheme. Both of these modes have their own set of benefits.

If you are not comfortable with the online mode, you can take the traditional route and visit the nearest LIC branch for the offline application process.

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