Jump to Content

On this page

The Atal Pension Yojana is a pension plan unveiled during the 2015-2016 Union Budget. It primarily targets individuals working in the unorganized sector, but it’s also accessible to those in the private sector, even though it doesn’t offer a pension benefit.

Upon reaching 60, an employee can receive a pension of Rs.1,000, 2,000, 4,000, or 5,000. The amount of this pension is determined by their contributions to the scheme and the age at which they began subscribing to it. In the event of the account holder’s death, their spouse can claim the pension. The Pension Funds Regulatory Authority of India manages the funds accumulated through the Atal scheme.

APY, or Annual Percentage Yield, is a financial term representing the total interest you would earn on a deposit or an investment over one year, considering the effect of compounding interest. It’s a valuable metric for comparing the potential return of different savings accounts or investments.

Unlike the Annual Percentage Rate (APR), which only accounts for the nominal interest rate and does not consider compounding, APY provides a more accurate picture of your potential earnings. The critical difference between APY and APR lies in how they incorporate compounding, which can significantly affect your returns over time.

Why Use an APY Calculator?

An APY calculator is a valuable tool for anyone looking to understand the potential return on their savings or investments. Here’s why:

  • Simplicity: An APY calculator simplifies calculating your returns, saving you from complex calculations.
  • Financial Planning: Knowing your potential returns can help you plan your finances better and set realistic savings or investment goals.

How to Use an APY Calculator

Using an APY calculator is straightforward. Here’s a step-by-step guide:

  1. Principal: Enter the initial amount of your deposit or investment.
  2. Interest Rate: Input the annual interest rate (as a percentage).
  3. Compounding Frequency: Select how often the interest is compounded (e.g., daily, monthly, quarterly, annually).

How Does the Atal Pension Yojana Return Calculator Work?

This APY calculator computes the Annual Percentage Yield (APY) using two inputs: the interest rate and the frequency of compounding. You can compare various offers with different compounding intervals by selecting options in the second box.

Consider the following examples:

  • An offer with an annual interest rate of 1% compounded annually results in an APY of 1%.
  • An offer with an interest rate of 0.75% compounded quarterly results in an APY of 0.702%.
  • An offer with an interest rate of 0.5% compounded daily results in an APY of 0.501%.

The key takeaway is that the higher the APY, the more advantageous the offer. Based on the APY calculations, the first offer provides the highest return.

The formula used to calculate the Atal Pension Yojana is as follows:

APY = (1 + r/n)n – 1


  • r represents the interest rate.
  • n represents the number of times interest is compounded per year.