Post Office Monthly Income Scheme (POMIS)
Post Office Monthly Income Scheme is a scheme that provides regular fixed monthly income on deposit of a lump sum amount in POMIS account. This monthly income is guaranteed. You will have to invest in this scheme by opening a POMIS account at any nearest post office.
Single and joint accounts can be opened under Post Office MIS scheme but the investment can be made only once in MIS account in lump sum in one MIS account.
Post Office Monthly Income Scheme is a good investment alternative for,
- Investors who are risk-averse
- Most suitable for senior citizens and retired persons as a regular source of income
- suitable for those who have lump sum amount to invest
- Who do not want income tax rebate under section 80C of the Income Tax Act, 1961
- Those who need a regular monthly income
- Those willing to make long-term investment
Post Office Monthly Income Scheme Eligibility
- Applicant should be an Indian citizen.
- Applicant should be residing in India.
- Applicant should be at least 18 years old.
The account can be opened on behalf of a minor by the parent or guardian. However, a minor above 10 years of age can open this account in his own name and he can operate the account as well. On turning major i.e. of 18 years of age, he/she will have to convert his/her minor account to an adult account.
Non-resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not eligible for this scheme.
Post Office Monthly Income Scheme Mode of Holding
Minimum two or maximum three people can open a joint account in MIS. In case of a joint account, it is mandatory that all the joint holders should have equal share in investment. The income received from this joint account will also be distributed equally to every account holder of such joint account.
Single MIS account can also be converted to joint account any time. Similarly, a joint MIS account can also be converted into single account any time. In order to change the mode of holding, a joint application is required to be submitted by all the account holders.
Number of holders: At least 1 and at most 3 individuals can open post office MIS account.
Key Features of Post Office Monthly Income Scheme
- Investment has a fixed maturity period of 5 years. Withdrawal from PO MIS is not allowed prior to 5 years from the date of investment
- PO MIS can be made through Cash, Demand Draft, Pay Order or Cheque
- PO MIS provides guaranteed and regular monthly income
- Multiple accounts can be maintained by an investor
- Maximum of 3 individuals can open a joint account under this scheme
- In case of joint account, each account holder will have equal share in the account
- Facility of premature closure of PO MIS account is available
- Post Office MIS account offers a nomination facility
- Sole or joint (up to three adults) holding is allowed
Benefits of Post Office Monthly Income Scheme
| Benefit | Details |
|---|---|
| Capital Protection | Post Office Monthly Income Scheme has government backing which makes it risk-free investment and its return is safe and fixed. |
| Lower Investment Requirement | The account can be opened with an amount as low as Rs.1000 and then in multiple of Rs.1000. |
| Alternate Source of Income | Post Office Monthly Income Scheme provides monthly income which is an additional source of income apart from your regular income. |
| Higher Interest Rate | Post Office Monthly Income Scheme is one of the highest-earning schemes with an interest rate of 7.40% p.a. PO MIS interest rates are reviewed every quarter. |
| Minor Account | Even a minor above 10 years of age can open this account. However, he can withdraw the amount after maturing for 18 years. |
| Transferrable | PO MIS account is transferable from one post office to any other post office across India for absolutely free. |
| Financial Stability | PO MIS offers financial stability by providing a fixed monthly payout. |
Post Office Monthly Income Scheme Documents Required
- Account opening form
- Passport size photographs of the applicant/s
- Proof of Identity: Copy of identity card such as Passport, Voter ID card, Driving License, Aadhaar Card, etc.
- Proof of Address: Copy of Passport, Voter ID card, Driving License, Aadhaar Card, recent utility bill
As per a recent notification of the Ministry of Finance, it has now become mandatory to provide your Aadhaar number and PAN to open a new POMIS account.
Post Office Monthly Income Scheme Quantum of Investment
Maximum investible amount of POMIS is as below,
- Single account holder: Rs.9 lakhs
- Minor account holders: Rs.3 lakhs
- Joint account holders: Rs.15 lakhs
However, the minimum amount that can be invested is Rs.1000, and in multiple of Rs.1000 thereafter, for any individual. Applicants can deposit the funds in the accounts opened under POMIS scheme either through cash or cheque.
Individuals can open multiple MIS account with maximum investment cap of Rs 9 lakh for the single holding and Rs.15 lakhs in joint holding. An individual can invest maximum Rs.9 lakh in MIS (including his share in joint accounts).
Limit for account opened on behalf of a minor as guardian will be separate.
Suppose, an excess amount is deposited by the account holder over the maximum allowed limit, then the excess fund deposited will be refunded to him and he is eligible for only PO Savings Account interest from the date of opening of account to the date of refund on such excess fund.
Post Office Monthly Income Scheme Taxation
Interest received from PO MIS account is taxable in the hand of the depositor. No TDS (Tax Deduction at Source) will be made. Investment in PO MIS is not eligible for tax savings under Section 80C of the Income Tax Act, 1961. PO MIS investment is exempt from wealth tax.
Post Office Monthly Income Scheme Tax Deducted at Source
No TDS (Tax Deduction at Source) will be made.
POMIS Bonus
Accounts opened after 1st Dec 2011 have no bonus facility. MIS accounts opened before 1st Dec 2011 used to enjoy a 5% bonus.
Post Office Monthly Income Scheme Interest Rate
With effect from 01.01.2024, interest rates under PO MIS are 7.4% per annum payable monthly. This interest rate will be applicable for all the investments made until 31.03.2024.
Currently, the interest rate is as given below,
| Details | Interest Rate |
|---|---|
| Rate of Interest | 7.4% per annum payable monthly |
Post office monthly incomes are directly credited to the investor's post office savings account on a monthly basis by ECS/CBS.
Historical Interest Rates of Post Office Monthly Income Scheme
| Financial Year | POMIS Interest Rate (Per Annum) |
|---|---|
| 1st January 2024 - 30th June 2024 | 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% |
Post Office Monthly Income Scheme Maturity
POMIS Account is matured after the expiry of 5 years from the date of opening. The account holder needs to submit prescribed application form along with pass book at concerned Post Office for closing the account.
If the balance in the PO MIS account is not withdrawn by the investor on maturity, PO MIS account will continue to earn interest for up to 2 years after account maturity at the Post Office savings account interest rate.
Pre-mature Closure of Post Office MIS Account & Penalty
It is allowed to closed the PO MIS account before its maturity by submitting prescribed application form with pass book at concerned Post Office. Good to note that the pre-mature closure of Post Office MIS Account is allowed only after the expiry of 1 year from the date of deposit.
A penalty in the form of deduction of a certain percentage of interest will be levied as mentioned in the following table.
| Account Closure | Penalty |
|---|---|
| Account closed after 1 year and before 3 years from the date of account opening | 2% will be deducted from the principal |
| Account closed after 3 years and before 5 years from the date of account opening | 1% will be deducted from the principal |
If the account holder dies before PO MIS account maturity, the account will be closed and amount will be refunded to nominee/legal heirs. In such a case, the interest will be paid up to the preceding month when the amount is refunded. No penalty will be levied in such cases on closing the account before its maturity.
How to Open a POMIS Account?
Stepwise process to open a Post Office Monthly Income Scheme are outlined below.
- Prerequisite for opening a PO MIS account is that you must have a Post Office savings account. If you do not have a savings account, you need to open the same first.
- Get an account opening form for PO MIS from your nearest Post Office. Alternatively, you can download POMIS Account Opening application form.
- Fill in all the required details in the form completely and put your sign wherever required.
- Submit the form along with the self-attested copies of all the required documents at the post office.
- Make the investment via cash or cheque.
Note: Carry the original documents/IDs for verification purpose. Do not forget to mention the mobile number and nominee details in the form. Check the form thoroughly before submitting.
How Does POMIS Work?
Suppose you invest Rs.4 lakh in POMIS for 5 years. The current interest rate is 7.40% so your investment will lock-in at 7.40% for 5 years.
- Investment Amount: Rs.4,00,000
- Rate of Interest: 7.40% p.a.
- Tenure: 5 Years
Formula for Calculation of Monthly Interest
POIMS Monthly Interest = Amount Invested * Annual Rate of Interest/12
= 400000*0.074/12 = 2466.67
- Monthly Income: Rs.2466.67 per month