The Post Office has been a trusted place for depositing and transacting with money. This is especially true for the elder generation. A number of saving schemes are offered by branches of the Post Office across the country.
Post Office Monthly Income Scheme is one such scheme where you invest a certain amount and earn a fixed interest every month. As the name suggests, you can invest in this from any post office.
Post Office offers POMIS among a host of banking products and services, under the purview of the Finance Ministry. Hence, it is highly reliable. It is a low-risk MIS and generates a steady income.
You can invest up to Rs. 4.5 lakh individually or Rs. 9 lakhs jointly, and the investment period is 5 years. Capital protection is its primary objective. For the quarter ending 30 September 2021, the interest rate is 6.6% per annum, payable monthly.
Features & Benefits of Post Office Monthly Income Scheme
Capital protection:
Your money is safe until maturity as this is a Government-backed scheme.
Tenure:
The lock-in period for Post Office MIS is 5 years. You can withdraw the invested amount when the scheme matures or reinvest it.
Guaranteed returns:
You earn income in the form of interest every month. The returns are not inflation-beating but are higher compared to other fixed-income investments like FD.
Tax-efficiency:
Your investment is not covered under Section 80C; TDS is not applicable either
Reinvestment:
You may reinvest the corpus post maturity in the same scheme for another block of 5 years to continue earning benefits.
Multiple account ownership:
You can open more than one account in your name. But the total deposit amount cannot exceed Rs. 4.5 lakhs in all of them together.
Joint account:
You can open a joint account with 2 or 3 people. In this case, an aggregate sum of up to Rs. 9 lakhs can be invested in this account.
Fund movement:
The investor can move the funds to a Recurring Deposit (RD) account, which is a feature Post Office has added recently.
Nominee:
The investor can nominate a beneficiary (a family member) so that they can claim the benefits and corpus if the investor passes away during the account’s term.
Ease of money/interest transaction:
You may collect the monthly interest directly from the post office or get it transferred automatically to your savings account. Reinvesting the interest in a SIP is also a lucrative option.
Eligibility criteria to open a POMIS account
Only a resident Indian can open a POMIS account.
NRIs cannot enjoy the benefits of this scheme.
Any adult can open an account.
You can open an account on the behalf of minor who is aged 10 years and above.
They can avail the fund when they become 18 years old.
A minor, after attaining majority, has to apply for conversion of the account in his name.
| Account Type | Maximum Deposit Amount Allowed |
| Single Account | Rs. 4.5 lakhs |
| Joint Account (2 or 3 adults) | Rs. 9 lakhs |
