Features of 8% assured return scheme for Senior Citizens

To protect our senior citizens from falling interest rates, the government has launched Varishtha Pension Bima Yojana 2017. This is a pension scheme that guarantees 8% return for 10 years.

The launch date has not been notified yet.

Government has launched this scheme earlier as well. A similar program by the same name ‘Varishtha Pension Bima Yojana’ was announced earlier where it offered a 9% return. This scheme was open from August 2014 to August 2015.

Let’s take a look at the features of the new scheme.

[Note: details which are not yet available have been taken from Varishtha Pension Bima Yojana  of 2014-15]


Minimum age 60 yrs
Maximum age No Limit
Minimum Investment (old scheme) Rs 66,665(one time )
Maximum Investment (old scheme) Rs 6,66,665(one time)
Lock- in 10 years
Interest rate 8% monthly
Minimum  Pension (old scheme) Rs 500 per month
Maximum Pension (old scheme) Rs 5,000 per month
Taxability of interest Treated as income in the year in which it is earned.
Tax benefits on Principal No tax benefits
Premature withdrawal (as per old scheme) Only for critical illness with penalty of 2%.


The Salient features of Varishtha Pension Bima Yojana -2017 Scheme announced recently are:

  1. AGE Criteria: No change in age criteria. Only Senior citizens (60 yrs or more) are eligible.
  1. Guaranteed rate: There is a change in guaranteed rate of interest. The 8% interest will be provided for 10 yrs as against 9% earlier. But earlier the lock in period was 15 yrs. In Present scheme, interest will be provided for 10 yrs.
  1. Pension Pay-outs: Also, Pension Pay-outs are same. It can be monthly, quarterly, half yearly or annually.
  1. Implementation by LIC: As earlier, LIC has been given the sole privilege to operate this scheme. The differential return – the difference between the return generated by LIC and the assured return of 8 per cent per annum would be borne by the government as a subsidy on annual basis



Once the scheme is launched, subscriptions will be available for 1 year.

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