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    Post Office Monthly Income Scheme

    • 5 min read
    • Last Modified Date: March 26, 2024
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    What is Post Office Monthly Income Scheme (POMIS)?

    • The Post Office Monthly Income Scheme (POMIS) is a government-backed savings scheme offered by India Post.
    • It is a low-risk investment option that allows you to invest a lump sum amount and earn a fixed monthly interest income.
    • The scheme is particularly popular among retirees and senior citizens who are looking for a steady stream of income.
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    Post office mis interest rate 2024

    Time IntervalPOMIS Interest Rate (Per Annum)
    1st January 2024 – 31st March 20247.40%
    1st October 2023 – 31st December 20237.40%
    1st April 2023 – 30th June 20237.40%
    1st January 2023 – 31st March 20237.10%
    1st October 2022 – 31st December 20227.10%
    1st April 2020 – 30th September 20206.60%
    1st January 2020 – 31st March 20207.60%
    1st October 2019 – 31st December 20197.60%
    1st July 2019 – 30th September 20197.60%
    1st January 2019 – 31st March 20197.70%
    1st October 2018 – 31st December 20187.70%
    1st January 2018 – 30th September 20187.30%

    Features and Benefits of Post Office Monthly Income Scheme

    • Fixed interest rate: The current interest rate for POMIS is 7.4% per annum, which is compounded quarterly and paid monthly. This rate is fixed for the entire tenure of the investment, which makes it a good option for those who are looking for predictable returns.
    • Government guarantee: POMIS is backed by the Government of India, which makes it a safe and secure investment option.
    • Low investment amount: You can start investing in POMIS with a minimum amount of Rs.1,000. This makes it an accessible investment option for even small investors.
    • Flexible investment options: You can invest in POMIS through a lump sum payment or through monthly installments.
    • Premature closure: You can prematurely close your POMIS account after 3 years, but you will be penalized for doing so.
    • Tax benefits: The interest earned on POMIS is taxable under the Income Tax Act. However, you can claim a deduction of up to Rs.1.5 lakh under section 80C of the Income Tax Act.

    Ref Link: https://www.indiapost.gov.in/Financial/pages/content/post-office-saving-schemes.aspx

    Eligibility Criteria to Open Post Office Monthly income Scheme Account

    • Only a resident Indian can open a Post office monthly income scheme account. 
    • NRIs cannot enjoy the benefits of this scheme. 
    • Any adult can open an POMIS account. 
    • You can open an account on the behalf of a 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 TypeMaximum Deposit Amount Allowed
    Single AccountRs. 9 lakhs
    Joint Account (2 or 3 adults)Rs. 15 lakhs

    Who Can Invest in POMIS?

    • Resident individuals (including minors)
    • Hindu Undivided Families (HUFs)
    • Joint accounts (up to three individuals)

    How to Invest in POMIS:

    You can open a POMIS account at any post office branch in India. You will need to fill out an application form and submit the required documents, such as identity proof and address proof. You will also need to deposit the minimum investment amount.

    Things to consider Before Investing in POMIS:

    • The interest rate on POMIS is fixed, which means that it will not keep pace with inflation.
    • There is a lock-in period of 5 years for POMIS. This means that you cannot withdraw your money before the end of the tenure.
    • You will be penalized for prematurely closing your POMIS account.

    Overall, POMIS is a good investment option for those who are looking for a safe and secure investment with a fixed interest rate. However, it is important to consider the lock-in period and the tax implications before investing.

    Here are some additional things to keep in mind:

    • The interest rate on POMIS is subject to change from time to time.
    • You can nominate a person to receive your investment and accrued interest in case of your death.
    • You can transfer your POMIS account to another post office branch.
    • From 01 January 2024, interest rate for Post office MIS will be 7.4% per annum, Payable Monthly.

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    • Nomination Option – A nominee facility is offered and may be altered later once a beneficiary opens an account (i.e. a family member). But, the successor can only collect the rewards after the account holder’s death.
    • Account Transfer – POMIS accounts can be directly moved from one PO to the other.
    • Incentive – There is no bonus available for accounts created on or after December 1st, 2011. Accounts opened before were entitled to a 5% deposit incentive.
    • Tax – This scheme is subjected to taxation and is not under Section 80C of the IT Act.

    Comparing POMIS with other Monthly Income Plans

    POMISMonthly Income Mutual FundMonthly Income Insurance
    Assured income at an annual rate of 7.40%Invested in 20:80 equity-debt ratio and hence no guaranteed incomeMonthly annuities (rates vary based on premiums & period)
    No TDSTDS appliedAnnuity is taxed
    Fixed return rateFloating rate as per the market movementNA
    Low-risk, suitable for the risk-averseSuitable for people with a high-risk appetiteDouble benefits of investment & insurance
    Withdrawal permitted after 12 months with penaltyExit load applicable if withdrawn before timeHigher surrender charges as this is a long-term investment
    Limit of Rs. 9 lakhs per account and Rs. 15 lakhs for a shared accountNo investment limitNo investment limit

    Eligibility Criteria to open a POMIS Account

    • A POMIS account can only be opened by a resident Indian.
    • This system does not apply to non-resident Indians.
    • NRIs cannot enjoy the benefits of this scheme. 
    • Anyone above the age of 18 can open an account.
    • You can open an account on behalf of a minor who is 10 years old or older. When kids reach the age of 18, they will be able to access the fund.
    • After reaching the age of majority, a minor must apply for conversion of the account in his name.

    Benefits of Post Office Monthly Income Scheme

    • When using a check to create an account, the cheque realization date is the account opening date.
    • In the event of joint accounts, every account holder will have equal portions.
    • There is no restriction on the number of POMIS accounts that can be held individually or jointly. Subject to the cumulative balance maximum criterion
    • The Post Office Monthly Income Scheme Account is available to minors aged 10 and up. When he or she reaches the age of 18, he or she will be invited to switch his or her underage account to an adult one.
    • The post office CBS or ECS deposits credit monthly directly into the investor’s savings account post office.
    • Post Office Monthly Income Scheme accounts can keep producing interest for up to two years after maturity if the investor does not remove the money. The relevant interest rate will be equivalent to that of a regular Post Office savings account.

    Documents Required for POMIS scheme

    • A copy of an ID issued by the government, like an Indian Voter Identification card, passport, Aadhaar card, or driver’s license.
    • An ID issued by the government or current utility bills.
    • Passport-sized photos

    Aadhaar and PAN Now Mandatory for post office mis scheme

    • As per a recent notification issued by the Ministry of Finance, it is now mandatory to provide your Aadhaar number and PAN to open a new POMIS account. If you have not been assigned an Aadhaar yet, you need to provide proof of application of enrollment for Aadhaar card or enrollment ID at the time of account opening and furnish the Aadhaar number to the accounts office within 6 months from the date of opening the account.

    Post Office Monthly Income Scheme Account Creation Process

    Follow the procedures below to create an account under the Post Office Monthly Income Scheme.

    •  Procure a POMIS Form from your nearest post office
    • You should have a savings account from the post office. If none, make one.
    • Purchase an application form at your local PO. You can also download the POMIS Account Application Form.
    • Fill out the form and bring it to the post office with self-attested copies of all relevant papers. Please keep in mind that you must bring the original documents for verification.
    • If any, mention the names, phone numbers, and DOB of nominees.
    • Proceed to make your first cash or cheque deposits (The lowest amount is Rs.1000/-).

    POMIS Early Withdrawal Penalty

    If you have to withdraw the money before 5 years, here’s what happens:

    • Tenure: The lock-in period for Post Office MIS is 5 years
    • You cannot withdraw an amount within the first year of deposit.
    • Between 1 to 3 years = 2% deduction on the principal amount and the remaining amount will be transferred to your account.
    • From  3 to 5 years = 1%  deduction reduction on the principal amount and the remaining amount will be transferred to your account.

    Post Office Monthly Income Scheme Interest Rates Vs Various Post Office Saving Schemes 

    Type of Saving SchemeInterest Rate
    5 years Post Office Time Deposit 6.7%
    1, 2, 3 years Post Office Time Deposit 5.5%
    Post Office Recurring Deposit6.2%

    Who should invest in POMIS?

    POMIS has the flexibility and reliability that appeal to risk-averse investors, albeit with limited tax benefits. If you think, you belong to that category, now is the time to consider starting one. 

    Do you want to invest in something more than POMIS?

    Have you thought about investing in real estate? You should if you haven’t already.

    But how is this possible? 

    Currently, real estate stands as one of the most dependable and enduring investment opportunities. It’s advisable to take action and commence your investments without delay.

    But are you unclear about where to start?

    Assetmonk is a premium Indian alternative investment platform featuring investments in Chennai, Bangalore, and Hyderabad. Assetmonk offers investments in commercial real estate structured debt with just Rs. 10 lacs. It offers an assured IRR of 17 percent. 

    If you are looking for the best investment opportunities in India for fixed income besides POMIS, then you must invest in the real estate market. A promising avenue within this sector is the realm of structured debt investments, particularly in commercial real estate. Structured debt investments in real estate involve tailored financing solutions designed for commercial real estate projects, providing investors with the opportunity to potentially achieve attractive returns and regular earnings. 

    The entry into this investment avenue is accessible with a relatively modest initial amount of 10 lakhs, and it offers the potential for returns ranging from 12% to 20%. These investment opportunities are facilitated through reputable alternative investment platforms like Assetmonk.

    Related Articles

    1. Saving Schemes In India 2024 Check Interest Rates & Eligibility
    2. Best Investment Options in India to get Higher Returns
    3. Post Office Investments – PPF, NSC, FD, RD, MIS, KVP, SSY.

    Frequently Asked Questions

    1.How can I withdraw money from my POMIS account after the tenure?

    You can retrieve the contributed amount from the account at the post office or have it credited to your savings account via ECS. You can withdraw the money every month as normal. But, the investor is permitted to let some money build before withdrawing it all at once within a few months.

    2.Can a single account be changed to a joint account?

    Yes, it can be changed. The opposite, i.e., from joint to single account can also be changed.

    3.What is the POMIS investment limit in 2024?

    The maximum deposit limit under POMIS is 9 lakhs for an individual account and 15 lakhs for a joint account. 

    4.Can I Transfer POMIS Account?

    Yes, your account can be transferred from one post office to another for absolutely free.

    5.Is There Any Tax Deduction At Source?

    No, there is no TDS (Tax Deduction at Source). But, the interests earned are taxable.

    6.Is there any nomination facility available in POMIS?

    POMIS enables you to choose and designate a beneficiary against the account who would receive the collected sum in the event of your untimely death.

    7.What Happens When The Investor Does Not Withdraw The Funds After 5 Years?

    After the maturity of 5 years, if the investor does not withdraw the amount, then he will continue to earn a simple interest for up to 2 years (as per the post office savings account interest rate).

    8.Can the nominee withdraw the amount in the case of the death of the investor before maturity?

    Yes, nominees can apply for death claim settlement immediately upon the death of the POMIS investor, even if the lock-in period of 5 years is not complete. They can apply for the death claim and get a refund of the investment amount and interest accumulated till death. 

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