If you are looking for a safe way to earn a fixed monthly income from your savings, the Post Office Monthly Income Scheme (POMIS) is a great choice. It is one of the most trusted and risk-free investment options available in India. The scheme is backed by the Government of India and offers a guaranteed return with a fixed interest rate of 7.4% per annum. Let’s understand in simple words how this scheme works, who can invest, and what benefits it offers.
What is the Post Office Monthly Income Scheme (POMIS)?
The Post Office Monthly Income Scheme is a savings plan run by India Post. It allows investors to deposit a lump sum amount and earn a fixed interest every month. This monthly interest acts like a steady income source, especially helpful for retirees, homemakers, and people looking for safe investments.
The interest rate is decided by the government and is revised every quarter. As of now, it offers 7.4% annual interest, which is paid every month.
Eligibility and Account Type
Any Indian resident can open a POMIS account. You can open the account individually or jointly (up to three adults). You can also open an account for a minor (child above 10 years) with the help of a guardian.
Here are the types of accounts you can open:
- Single Account – Opened by one person.
- Joint Account – Opened by up to three adults together.
- Minor Account – Opened by parents or guardians for their child.
Investment Limit
There is a limit on how much you can invest in the scheme. The amount varies for single and joint accounts:
| Type of Account | Minimum Deposit | Maximum Deposit |
|---|---|---|
| Single Account | ₹1,000 | ₹9,00,000 |
| Joint Account | ₹1,000 | ₹15,00,000 |
| Minor Account | ₹1,000 | ₹9,00,000 |
You can invest in multiples of ₹1,000. The higher your deposit, the more interest you will receive every month.
Interest Rate and Income Example
The current interest rate is 7.4% per annum. This interest is paid monthly and can be credited directly to your savings account at the post office or bank.
Example:
If you invest ₹9,00,000 in a single account:
- Annual interest = ₹9,00,000 × 7.4% = ₹66,600
- Monthly income = ₹66,600 ÷ 12 = ₹5,550
So, every month you will receive ₹5,550 as interest.
Tenure and Withdrawal Rules
The tenure (lock-in period) of the POMIS is 5 years from the date of opening the account. After the maturity period, you can withdraw your entire amount along with the final interest.
If you wish to withdraw earlier, the following rules apply:
- Before 1 year: No withdrawal is allowed.
- Between 1–3 years: Deduction of 2% from the principal amount.
- After 3 years but before 5 years: Deduction of 1% from the principal.
After the account matures at 5 years, you can either withdraw the amount or reinvest it in a new MIS account.
How to Open a POMIS Account
Opening a POMIS account is very simple. You can visit any nearby post office branch and follow these steps:
- Fill out the POMIS account opening form.
- Attach passport-size photos and ID proof (Aadhaar, PAN, Voter ID, etc.).
- Provide address proof (electricity bill, ration card, etc.).
- Deposit the investment amount via cash, cheque, or demand draft.
- Once processed, your account will be opened, and you’ll receive a passbook.
Benefits of the Post Office MIS
Here are some main advantages of this scheme:
- Safe and Secure – It is a government-backed scheme, which means there is no risk of losing money.
- Regular Monthly Income – You receive a fixed amount every month, which is great for retirees or homemakers.
- Attractive Interest Rate – 7.4% is higher than most bank savings accounts and even some FDs.
- Easy to Operate – You can open or manage the account easily at any post office across India.
- Joint Account Option – You can invest jointly with family members and increase the deposit limit.
- Nomination Facility – You can nominate someone to receive the money in case of your absence.
Tax Benefits and Considerations
While the scheme is very safe, it has no tax benefits under Section 80C. The monthly interest you receive is taxable income and must be added to your annual income for tax calculation.
However, because of its guaranteed and stable returns, many people still prefer it over market-based investments.
Who Should Invest?
The Post Office MIS is ideal for:
- Retired individuals looking for a steady monthly income.
- Homemakers who want to earn interest from their savings.
- Conservative investors who prefer safety over high returns.
- Parents who want to save for their children with guaranteed growth.
Final Thoughts
The Post Office Monthly Income Scheme is one of the safest investment options for those who want a regular monthly income with zero risk. With an interest rate of 7.4%, it provides better returns than a savings account while ensuring your capital remains completely safe.
If you’re someone who wants peace of mind, financial stability, and a predictable income, the Post Office MIS is a perfect fit. All you need to do is make a one-time deposit, and you can enjoy monthly interest payments for the next five years — simple, secure, and rewarding!