What is Pradhan Mantri Jan Dhan Yojana

By: Bank of Baroda
Wed Jul 3, 2019
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Since his election as the Prime Minister of India, Narendra Modi has launched several schemes that are targeted to people of different income groups – especially those belonging to the middle and lower-income groups. One of the most popular schemes he’s launched is known as the Pradhan Mantri Jan Dhan Yojana. But what is Jan Dhan Yojana? Let’s find out.

What is Pradhan Mantri Jan Dhan Yojana

Launched in August 2014, the Pradhan Mantri Jan Dhan Yojana is a savings scheme introduced by the PM to ensure that every Indian citizen can open a savings account and gain a sense of financial independence without worrying about maintaining account balances. This scheme targets people belonging to the economically weaker and middle-income groups. It encourages them to open a savings account and benefit from a bouquet of financial facilities and services. Apart from providing a zero balance savings account, account holders also become eligible for benefits like credit insurance and pension as well as easy and affordable remittance, among other things.

What is the benefit of Jan Dhan Account?

Having explained what is PMJDY, let’s take a look at some benefits of the Jan Dhan account. They are as under:

It is a zero balance savings scheme

As mentioned above, the Jan Dhan Account is a zero balance savings account. This means that account holders don’t have to worry about maintaining an average monthly balance in their savings account. They are not charged or penalised for non-maintenance of minimum monthly balances.

Account-holders can avail loans and overdraft facilities

People belonging to economically weaker sections, often do not have a bank account and have to rely on private money lenders for loans. These money lenders often quote high-interest rates, thus adding to the financial woes of such people, and putting them in an infinite loop of loans and EMIs. However, with PMJDY, account holders can avail bank loans at loan interest rates. People who’ve maintained balances for six consecutive months can also avail overdraft facilities of ₹5,000 against savings parked in the PMJDY account.

Account-holders receive accident and life insurance cover

Since people belonging to economically weaker sections cannot afford to invest in insurance, the PMJDY scheme offers the added incentive of accident and life insurance cover. This coverage is provided complimentary with the RuPay debit card under which account holders receive accidental insurance coverage and life insurance coverage worth ₹100,000 and ₹30,000 respectively.

Benefits from government schemes are directly transferred into the PMJDY account

Account-holders can easily access their pension accounts through the PMJDY account. Those individuals who have invested in any government schemes like the SCSS or Atal Pension Yojana, can opt to have their benefits directly transferred into their Jan Dhan savings account.

Final word: Now that you know what is PM Jan Dhan Yojana, and its benefits, you can consider opening your account and availing the benefits that go with it. Visit your nearest bank and find out how to open your PMJDY account.

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