The Post Office Monthly Income Scheme (POMIS) is a government-backed savings plan designed to provide a steady monthly income to investors. This scheme is particularly popular among individuals seeking low-risk investments with guaranteed returns. With an interest rate of 7.4% per annum (as of February 2025), POMIS offers fixed monthly payouts, making it an ideal choice for retirees or those looking for supplementary income. The scheme is available at any post office across India and offers flexibility in account types, including single, joint, and minor accounts.
One of the standout features of POMIS is its simplicity and accessibility. The minimum investment starts at ₹1,000, and the maximum limit extends up to ₹9 lakh for single accounts and ₹15 lakh for joint accounts. The scheme has a lock-in period of five years, ensuring disciplined savings while providing the benefit of monthly interest payouts. In this article, we’ll explore the details of the POMIS scheme, including its features, benefits, eligibility criteria, and how you can earn ₹5,550 per month by investing in this scheme.
Article Contents
Post Office Monthly Income Scheme (POMIS)
| Interest Rate | 7.4% per annum (payable monthly) |
| Minimum Investment | ₹1,000 |
| Maximum Investment | ₹9 lakh (single account), ₹15 lakh (joint account) |
| Lock-in Period | 5 years |
| Monthly Payout | Fixed monthly income based on investment |
| Eligibility | Indian residents above 18 years; minors can open accounts through guardians |
| Taxability | Interest is taxable; no TDS or Section 80C benefits |
| Premature Withdrawal | Allowed with penalties: 2% deduction before 3 years, 1% after 3 years |
| Nomination Facility | Available |
| Transfer Facility | Account can be transferred between post offices |
How to Earn ₹5,550 Per Month with POMIS
To earn a monthly income of ₹5,550 through POMIS, you need to invest a lump sum amount that generates this payout based on the current interest rate of 7.4%.
Thus, by investing the maximum permissible amount of ₹9 lakh in a single account under POMIS, you can receive a fixed monthly income of ₹5,550.
Key Features of POMIS
1. Guaranteed Returns
POMIS offers assured returns at an interest rate of 7.4% per annum. Since it is backed by the Government of India, there are no market risks involved.
2. Flexible Investment Limits
- Minimum deposit: ₹1,000 (in multiples of ₹1,000)
- Maximum deposit: ₹9 lakh for single accounts and ₹15 lakh for joint accounts
- For minor accounts: Maximum limit is ₹3 lakh
3. Monthly Interest Payout
Interest is paid every month starting one month after the account opening date. This ensures a steady cash flow for investors.
4. Lock-in Period
- Before three years: 2% deduction on principal
- Between three and five years: 1% deduction on principal
5. Nomination Facility
Account holders can nominate beneficiaries who will receive the proceeds in case of the depositor’s demise.
6. Transferability
POMIS accounts can be transferred from one post office to another across India without any hassle.
Benefits of the Post Office Monthly Income Scheme
- Risk-Free Investment: Backed by the Government of India, POMIS ensures capital protection and guaranteed returns.
- Regular Income: Ideal for retirees or individuals seeking supplementary income through fixed monthly payouts.
- Easy Accessibility: Accounts can be opened at any post office with minimal documentation.
- Multiple Accounts: Investors can open multiple accounts within the prescribed maximum investment limits.
- Post-Maturity Interest: If the maturity amount is not withdrawn immediately after five years, it continues to earn interest at the post office savings account rate for up to two years.
- No Market Dependency: Returns are unaffected by market fluctuations.
Eligibility Criteria For Post Office Monthly Scheme
- The applicant must be an Indian resident.
- Individuals above 18 years are eligible.
- Minors aged 10 or above can have accounts opened on their behalf by guardians.
- Non-resident Indians (NRIs) are not eligible.
How to Open a POMIS Account?
- Ensure you have a post office savings account.
- Collect and fill out the POMIS application form from your nearest post office.
- Submit identity proof (Aadhaar card, PAN card) and address proof along with passport-sized photographs.
- Make the initial deposit via cash or cheque (account opening date will be based on cheque realization).
- Nominate beneficiaries if desired.
- Once processed, you will receive your passbook containing account details.
Tax Implications
While POMIS offers attractive returns, it does not provide tax benefits under Section 80C of the Income Tax Act. The interest earned is fully taxable as per your income tax slab but is not subject to Tax Deducted at Source (TDS).
Comparison with Other Savings Schemes
| Feature | Post Office MIS | Fixed Deposit (FD) | Public Provident Fund (PPF) |
|---|---|---|---|
| Interest Rate | 7.4% p.a. | ~6%-8% p.a.* | 7.1% p.a.* |
| Lock-in Period | 5 years | Flexible | 15 years |
| Monthly Income | Yes | No | No |
| Tax Benefits | No | Yes (for certain FDs) | Yes |
| Risk Level | Low | Low | Low |
Frequently Asked Questions (FAQs)
Q1: Can I open multiple POMIS accounts?
Yes, you can open multiple accounts as long as the total deposits across all accounts do not exceed ₹9 lakh for single accounts or ₹15 lakh for joint accounts.
Q2: Is premature withdrawal allowed?
Yes, but it comes with penalties:
- Before three years: 2% deduction on principal
- Between three and five years: 1% deduction on principal
Q3: What happens after maturity?
You can withdraw your principal amount or reinvest it in another term under POMIS.
Q4: Is there any bonus on maturity?
No bonus is offered on accounts opened after December 2011.
Q5: Can minors open a POMIS account?
Yes, minors aged 10 or above can have accounts opened in their name by guardians.
