The Post Office Monthly Income Scheme (POMIS) is a government-backed savings scheme that provides a secure and convenient way for an investor to generate a regular monthly income from this investment at high-interest rates. The PO-MIS is an appealing option for those seeking financial stability and income generation while living abroad. In this brief guide, we will explore the key features and benefits of the POMIS.
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The full form of PO-MIS is the Post Office Monthly Income Scheme. It is a popular investment option offered by the Postal Department of India that aims to provide an investor with a regular and guaranteed monthly income.
An individual can invest their money in the PO-MIS scheme and receive a fixed monthly income in the form of interest payments.
The Post Office Monthly Income Scheme is a convenient and risk-free investment plan that helps an investor to park their funds and receive consistent returns.
The key features of the Post Office Monthly Income Scheme (POMIS) are listed in the table below:
|Launched By||Department of Posts, Government of India (GoI)|
|PO-MIS Interest Rates for NRI/OCI/PIO||
|Minimum Investment Limit||Rs. 1,000 (thereof, in multiples of Rs. 1,000)|
|Maximum Investment Limit||
|Maturity Period||Minimum 5 years|
|Monthly Income Payouts||
To start investing in the Post Office Monthly Income Scheme (PO-MIS), an applicant must fulfil the following eligibility criteria:
Citizenship: The applicant must be a resident Indian
Age: The applicant must be at least 18 years old.
No Maximum Age Limit: There is no upper age limit to invest in PO-MIS.
Minor Account: One can open a PO-MIS account on behalf of the minor who is at least above 10 years of age.
Joint Account: Investors can open a single or joint account. In a joint account, all account holders must be resident Indians.
The following documents are required for an applicant to open a PO-MIS account in the post office:
|Identity proof||Any government-issued ID such as:
|Address proof||Any document that shows your current address, such as:
|Passport size photographs||Two recent passport-size photographs|
To open a PO-MIS account, an applicant can follow these steps:
Step 1: Visit a post office branch.
Step 2: Fill out a PO-MIS account opening form.
Step 3: Submit the required documents, including:
Identity proof (such as PAN card, Aadhaar card, or voter ID card)
Address proof (such as electricity bill, water bill, or bank statement)
Passport size photographs
Step 4: Deposit the minimum investment amount of Rs. 1,000.
Step 5: Receive the PO-MIS account passbook.
The rules on premature withdrawals from the Post Office Monthly Income Scheme (PO-MIS) account are as follows:
|Conditions of Period of Withdrawals from POMIS Account||Conditions|
|Before 1 Year of POMIS account||No withdrawals allowed|
|Between 1 – 3 years of POMIS account||2% penalty on the principal amount before refund|
|Between 3 – 5 years of POMIS account||1% penalty on the principal amount before refund|
|If the account holder dies before the maturity of the POMIS account||
Note: To close the PO-MIS account early, the account holder is required to submit the form and passbook to the Post Office.
Post Office Monthly Income Scheme offers the following advantages to the investors:
Protection of Investment: PO-MIS is a government-backed scheme, which means that the invested amount is safe and secure.
Assured Returns: PO-MIS offers guaranteed returns in the form of interest, which is credited to the investor's account every month.
Multiple Account Ownership: Multiple PO-MIS accounts can be opened for an individual, but the total deposit amount cannot exceed Rs. 9 lakhs.
Low-Risk Investment: PO-MIS is a low-risk investment, as it is not subject to market fluctuations.
Affordable Deposit Amount: An investor can start investing in PO-MIS with a minimum deposit of Rs. 1,000.
Flexible Tenure: The tenure of PO-MIS is 5 years, which can be extended in blocks of 5 years.
Liquidity: Investors can withdraw their investment from PO-MIS after the lock-in period of 5 years, subject to a penalty.
Easy to Open and Operate: A PO-MIS account can be opened at any post office in India.
Tax Efficiency: The interest earned on PO-MIS is taxable, but there is no TDS deducted.
Even though NRI/OCI/PIO cannot invest in POMIS, they can still benefit from it in the following ways:
Indirect Benefits: POMIS is a government-backed savings scheme that offers a steady monthly income to investors. This helps to improve the financial stability of Indian residents, including the families of NRIs/OCIs/PIOs.
Remittances: You can send money to your families in India through POMIS. This can help your families to invest in POMIS and earn a steady monthly income.
Nomination Facility: POMIS account holders can nominate a beneficiary to receive the balance amount in the account in case of the depositor's death. This can help to ensure that the NRI's family is financially secure even after their death.
Let us understand the difference between PO-MIS vs. Monthly Income Plans (MIPs) from the table below:
|Feature||Post Office Monthly Income Scheme (POMIS)||Monthly Income Plans (MIPs)|
|Issuer||Government of India (GoI)||Insurance companies|
|Liquidity||Lock-in period of 5 years||Lock-in period of 5 years|
|Taxation||Interest income is taxable||Tax benefits under Section 80C and Section 10(10D) of the IT Act, 1961|
|Investment amount||Minimum of Rs. 1,000||Varies from plan to plan|
|Tenure||5 years, extendable in blocks of 5 years||Depends on the chosen plan|
|Other features||Multiple account ownership, nominee facility||Offers additional features such as SIP, SWP, life insurance coverage, riders, etc.|
The historical interest rates offered under the PO-MIS scheme are as follows:
|Period||PO-MID Interest Rate (in % p.a.)|
|15 January 2000 – 28 February 2001||11.00%|
|01 March 2001 – 28 February 2002||9.50%|
|01 March 2002 – 28 February 2003||9.00%|
|01 March 2003 – 30 November 2011||8.00%|
|01 December 2022 – 31 March 2012||8.20%|
|01 April 2012 – 31 March 2013||8.50%|
|01 April 2013 – 31 March 2016||8.40%|
|01 April 2016 – 30 September 2016||7.80%|
|01 October 2016 – 31 March 2017||7.70%|
|01 April 2017 – 30 June 2017||7.60%|
|01 July 2017 0 31 December 2017||7.50%|
|01 January 2018 – 30 September 2018||7.30%|
|01 October 2018 – 30 June 2019||7.70%|
|01 July 2019 – 31 March 2020||7.60%|
|01 April 2020 – 30 September 2020||6.60%|
|01 October 2020 – 31 March 2023||7.10%|
|01 April 2023 – 30 June 2023||7.40%|
The Post Office Monthly Income Scheme (POMIS) offers a safe and stable investment option for individuals seeking regular monthly income. With a fixed interest rate, government backing, and tax benefits, it provides a reliable avenue for those looking to secure their financial future while minimizing risk. POMIS is an attractive choice for risk-averse investors seeking steady returns over a shorter investment horizon.
|Issuer||Government of India||Banks and other financial institutions|
|Returns||Fixed and guaranteed||Fixed and guaranteed|
|Liquidity||Low (lock-in period of 5 years)||Medium (may have premature withdrawal penalties)|
|Taxation||Interest income is taxable||Interest income is taxable|
|Investment amount||Minimum of Rs. 1,000||Varies from bank to bank|
|Tenure||5 years, extendable in blocks of 5 years||7 days – 10 years|
Post Office Monthly Income Scheme (POMIS)
Senior Citizen Savings Scheme (SCSS)
National Savings Certificate (NSC)
Kisan Vikas Patra (KVP)
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
+Returns Since Inception of LIC Growth Fund
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