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Post Office Monthly Income Scheme: Characteristics, benefits, and comparison with other monthly plans

[] Read on to know about the benefits Post Office Monthly Income Scheme, the eligibility criteria and related information.

The Post Office has been a reliable platform to deposit and exchange money for a long time. Post offices across the country provide a variety of savings plans. The Post Office Monthly Income Scheme (POMIS) is one such scheme in which you invest a particular amount and earn a fixed interest rate every month.

You are reading: Post Office Monthly Income Scheme: Characteristics, benefits, and comparison with other monthly plans

Post Office Monthly Income Scheme: Characteristics

  • The investment is completely riskless.
  • The scheme’s maturity period is 5 years (60 months) from the date of opening the account.
  • The consumer has the option of designating another person to receive the benefits in the event of his or her untimely death.
  • The programme allows for the creation of a recurring deposit into which cash can be transferred.
  • POMIS can be purchased by minors.
  • The POMIS account can be moved for free from one post office to another.
  • A separate account must be formed for each deposit made at the post office by the customer. The benefit here is that a single person can register many accounts, with a maximum account balance limit of Rs 4.5 lakh.
  • The minimum deposit is Rs 1,000 and the maximum can be in multiples of 1,000.
  • The money invested in POMIS is not tax deductible under Section 80C of the Income Tax Act of 1961. Furthermore, it has no TDS.
  • A cheque or cash can be used to open the account. If the customer decides to make the initial payment by cheque, the date of cheque realisation in the government account will be the date the client’s account is opened.
  • There can be a minimum of 1 person and a maximum of 3 in a joint account. Two or three people can open a joint account to have an equal portion, with a maximum limit of Rs 9 lakhs. If necessary, a single account can be converted to a joint account, and vice-versa.
  • ECS/CBS deposits Post Office credits directly into the investor’s post office savings account every month.
  • The POMIS can earn good interest after two years, in a situation where the investor is not removing the money.

Post Office MIS scheme benefits

  • MIS protects the capital.
  • It guarantees the customer a fixed monthly income.
  • It outperforms debt-based products in terms of returns.

Post Office MIS interest rate 2022

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The interest rate of Post Office MIS scheme is 6.6% per annum, payable monthly. These rates are effective from July 1, 2022 to September 30, 2022. One can earn a monthly interest of Rs 55 on Rs 10,000 deposit.

Post Office MIS calculator example

  • After opening an account, investors must make appropriate investments. The lowest investment for a single account is Rs 1,000, while the maximum investment is Rs 4,50,000.
  • The minimum investment for a joint account is Rs 1,000, while the maximum investment is Rs 9,00,000.


Suppose you make an investment of Rs 1,00,000 with a 5-year maturity period. With an annual interest rate of 6.6%, the fixed monthly income will be Rs 550. You will also receive your deposited funds at the end of the scheme’s tenure.

Post Office Monthly Income Scheme: Eligibility criteria

  • A POMIS account can only be opened by an Indian resident.
  • An account can be opened by any adult.
  • You can open an account on behalf of a minor who is 10 years of age or older. After reaching 18, they will be able to access the fund.
  • After becoming an adult, a minor must apply for conversion of the account in their name.

Post Office Monthly Income Scheme: Steps to open an account

  • You must first have a Post Office savings account. If you do not have an account, create one.
  • Pick up a POMIS application form from your local Post Office or download the application form for opening an account by clicking here.
  • Submit the completed form with a photocopy of your ID, residency proof, and two passport-size photos. Mention the nominees’ names, dates of birth and phone numbers (if any). Bring the originals with you for verification.
  • Get the signatures of your witness and any nominees.
  • Make an initial cash or check deposit (minimum of Rs 1,000). The date on the cheque will be the account opening date, in the case of a post-dated cheque.
  • The Post Office executive will supply you with the details of your newly opened account once the processing is completed.

Post Office Monthly Income Scheme: Comparison with other monthly plans 

POMIS Mutual Fund Income Insurance
A post office investment plan promises a guaranteed monthly income of 6.60 percent per year. A debt-oriented mutual fund that invests in a 20:80 ratio of equities and debt instruments. Annuities are paid to the insured in the form of monthly income under this type of retirement plan.
Monthly earnings are assured. Monthly earnings aren’t guaranteed. Rather, it is determined by the returns earned throughout that time period. Monthly earnings are set and guaranteed. It is built from the premiums paid throughout the course of the policy’s life.
TDS does not apply. Interest, on the other hand, is taxable. TDS does not apply. The monthly annuity is taxed.
MIS is ideal for those who cannot afford to take any risks, such as the elderly and retired. MIPs are for risk-averse investors who prefer to invest in something in the middle of safe-but-unyielding debt funds and risky-but-yielding equity funds. Retirement monthly income plans are for folks who want the insurance and investing benefits in one package.
The locking term is only one year, after which the investor can release the funds, but only after paying a penalty of 1-2 percent. For cashing out the units within one year of investment, the investor must pay a 1% exit fee

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In MIPs, there is no maximum investment amount.

Because this is a long-term plan, the investment tenure is relatively long, and the insured must pay surrender charges if the money is withdrawn before the policy term expires.
The amount you can invest in POMIS is limited (4.5 lakh for a single account, 9 lakh for a joint account) Returns are not guaranteed. They can sometimes rise to 14 percent or fall to negative levels. There is no maximum investment amount.

Post Office Monthly Income Scheme: Who should invest?

Risk-averse investors get the flexibility and reliability they want, albeit with minimal tax benefits. 

  • The Post Office Monthly Income Scheme is appropriate for investors who want a set monthly income but do not want to incur any risks with their investments. As a result, it is more beneficial for retired people or older persons.
  • It is appropriate for investors looking for a one-time investment to generate consistent income to support their lifestyle.
  • It is also suitable for investors interested in making long-term investments.

Post Office Monthly Income Scheme: Drawbacks of early withdrawal

  • The customer obtains no benefits if the deposit is withdrawn within one year.
  • Withdrawing a deposit between one and three years: The consumer receives their entire deposit after a 2% penalty is deducted.
  • Deposit withdrawal after three years: The customer recovers the entire deposit after a 1% penalty is deducted.


In the case of a shared account, how is the individual account holder’s portion calculated?

In a joint account, each joint account holder will have an equal portion.

What if I don’t want to take my money out when the account matures?

If you don’t withdraw the money when the account matures, the money will stay in the account and receive a simple interest rate as per the Post Office Savings Account for a period of two years.

Is this scheme appropriate for elderly people?

Yes. Senior citizens would benefit from this system since they could put their life savings in the account and earn interest on their monthly costs.

What happens to my account in case of relocation due to a job assignment?

If you relocate, you can easily transfer your POMIS account to the Post Office in the new city at no additional charge.

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Category: Must Knows

Debora Berti

Università degli Studi di Firenze, IT

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