The Post Office Monthly Income Scheme (POMIS) is a government-backed savings plan. It comes with a monthly interest rate notified by the Ministry of Finance. The scheme offers an interest rate of 7.40% annually, making it useful for retirees and anyone looking for a steady monthly income.
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The Post Office Monthly Income Scheme allows you to invest for five years and receive monthly interest. You can start with a minimum of ₹1,000, and add more in multiples of ₹1,000. This makes it easy for both small and large investors to invest. The scheme is often chosen by retirees, senior citizens, and families who prefer a steady income. At the end of five years, the full amount you deposited and the last interest payment are returned.
Key Features of the Post Office Monthly Income Scheme
Maximum Investment Limit: The scheme allows a maximum investment of ₹9 lakh in a single account. In the case of a joint account, the limit is higher at ₹15 lakh. This suits individual investors and families who want to invest together.
Premature Closure: The account cannot be closed within the first year. If closed after 1 year but before 3 years, 2% of the deposit is deducted as a penalty. For closures after 3 years and before maturity, the penalty is reduced to 1% of the deposit.
Lock-in Period: The account runs for a fixed term of 5 years. In case of the account holder’s demise before maturity, the deposit is refunded per the General Rules, along with applicable interest up to the preceding month.
Eligibility: An account can be opened by a customer, jointly by up to three adults, by a guardian on behalf of a minor, or by a person of unsound mind. A minor who has completed 10 years of age can also open and operate an account in their own name.
Extension: The Post Office Monthly Income Scheme Account is not eligible for any extension beyond its initial maturity period of 5 years.
Post Office MIS Interest Rates
The Post Office Monthly Income Scheme (POMIS) offers interest rates that are notified by the Government of India and revised occasionally. Over the years, the rates have changed in line with market conditions and government policies. The table below shows post office MIS interest rates for different time intervals:
Time Interval
POMIS Interest Rate (% p.a.)
From 1st January 2024 onwards
7.40
1st October 2023 – 31st December 2023
7.40
1st April 2023 – 30th June 2023
7.40
1st January 2023 – 31st March 2023
7.10
1st October 2022 – 31st December 2022
7.10
1st April 2020 – 30th September 2020
6.60
1st January 2020 – 31st March 2020
7.60
1st October 2019 – 31st December 2019
7.60
1st July 2019 – 30th September 2019
7.60
1st January 2019 – 31st March 2019
7.70
1st October 2018 – 31st December 2018
7.70
1st January 2018 – 30th September 2018
7.30
Who Should Consider the Post Office Monthly Income Scheme Account?
The Post Office Monthly Income Scheme (MIS) suits depositors seeking financial stability through secure and predictable returns. It is particularly recommended for:
Retirees and Senior Citizens: To ensure a steady income stream and financial independence during retirement.
Investors with Low-Risk Appetite: For investors who prefer safeguarding their savings while earning fixed monthly returns.
Families with Regular Expense Needs: To generate a reliable source of income for managing household and recurring expenses.
Investors Seeking Stable Returns: For customers who wish to avoid market volatility and opt for predictable earnings.
How to Open a Post Office Monthly Income Scheme Account?
To open a Post Office Monthly Income Scheme Account, applicants must visit a Post Office branch and submit the required forms and documents.
Required Forms:
Account Opening Form
KYC Form (for new customers or updating details)
Mandatory Documents:
PAN Card
Aadhaar Card. If not available, any one of the following: Passport, Driving Licence, Voter ID, Job Card issued by MNREGA, or a Letter from the National Population Register.
Additional Requirements:
For a joint account, KYC documents of all account holders are needed.
For a minor account, the guardian’s KYC documents are required.
Proof of retirement benefits is needed for senior citizens applying under VRS.
Deposits over ₹10 lakh require proof of source of funds as per PMLA 2002.
Other Guidelines:
Conversion from a joint to a single account or vice versa is prohibited.
A minor must submit a fresh account form and KYC upon attaining majority.
Accounts can only be opened via cheque at branch Post Offices.
NRIs, Trusts, Firms, and Institutions are not eligible to open the account.
Post Office Monthly Income Scheme (POMIS) vs Other Savings Schemes
The following table compares the Post Office Monthly Income Scheme (POMIS) with other saving schemes of India Post based on their current interest rates:
Scheme Name
Interest Rate (% p.a.)
Post Office Monthly Income Scheme
7.40
Post Office Recurring Deposit
6.70
Post Office Time Deposit (1, 2, 3 years)
6.90, 7, 7.10 respectively
Post Office Time Deposit (5 years)
7.50
National Savings Certificate
7.70
Senior Citizen Savings Scheme
8.20
Public Provident Fund
7.10
Post Office Monthly Income Scheme Premature Closure
The post office monthly income scheme permits premature closure, but certain rules apply depending on the closure time.
Within 1 Year: Premature closure is not allowed.
Between 1 and 3 Years: If the account is closed during this period, 2% of the deposit is deducted.
After 3 Years: If the account is closed any time after 3 years but before maturity, 1% of the deposit is deducted.
Balance Payment: After deduction, the remaining deposit, along with the interest, is paid to the account holder.
Key Takeaways
The Post Office Monthly Income Scheme is a structured savings option that provides fixed monthly payouts for five years, making it suitable for those who want a steady income. With defined rules on deposits, withdrawals, and premature closure, it is an option for retirees, senior citizens, and families. By offering regular earnings at an interest rate of 7.40% per annum, along with the return of the principal at maturity, the scheme remains one of the established savings options under India Post.
FAQs
How can I get ₹5,000 interest monthly in the post office?
To earn ₹5,000 per month, you must invest a large enough amount in POMIS, depending on the current interest rate. For example, at 7.40% per annum, a deposit of about ₹8.1 lakh can give around ₹5,000 monthly interest.
What is the post office's monthly interest of ₹1 lakh?
At 7.40% per annum, a deposit of ₹1 lakh gives about ₹617 as monthly interest.
Which is better, MIS or FD?
MIS gives fixed monthly payouts for five years, while bank FDs offer different tenures and payout choices such as monthly, quarterly, or at maturity. MIS suits people who prefer a regular monthly income, while FDs provide more flexibility.
Is MIS tax-free?
No, the interest earned from the MIS post office is taxable per your income tax slab. However, no TDS is deducted by the Post Office.
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