Post Office Monthly Income Scheme – The Post Office Depository Service offers a wide range of investment opportunities with set returns. All of these schemes are supported by the sovereign guarantee, making this a government-backed investment option. In comparison to equities shares and many fixed-income options, these schemes are therefore safer investment options.
One of the highest-earning programs is the Post Office Monthly Income Scheme, which has an interest rate of 6.7%, among others like the Post Office Savings Account, Post Office Recurring Deposit, and Post Office Time Deposit. As implied by the scheme’s name, interest is paid out on a monthly basis. This program is acknowledged and approved by the Ministry of Finance, just like other post office programs are.
Post Office Monthly Income Scheme Kya Hai
A monthly Income Scheme (MIS) is a type of investment plan that guarantees returns to investors at an annual interest rate of 6.60%. You can receive these returns as a set monthly income.
The Indian Postal Service’s investment program is called Post Office Monthly Income Scheme (POMIS). It guarantees the investor regular monthly income at a guaranteed rate of return of 6.60% annually. Expert investors believe that MIS is one of the best investment strategies because it has three benefits: it protects your wealth, generates higher returns than debt instruments, and ensures a set monthly income.
POMIS Scheme Features
- Transferring a POMIS account from one post office to another is possible. The best part is that it is completely free to do.
- You must open a different account for each post office deposit you make. The advantage is that one individual can create ‘N’ accounts (of course up to the upper limit).
- Reinvesting in POMIS is an option for the maturity amount realized at the completion of the term.
- An additional nominee for the investor’s Post Office Monthly Income Scheme account is permitted. As a result, in the terrible event of his passing, his nominee is now entitled to receive his money.
- The good news is that your capital won’t be eaten up by TDS (Tax Deduction at Source) in this situation. The bad news is that these interest earnings are subject to taxation.
- The MIS maturity period is 5 years. Ideally, you ought to take the money out after five years. You will receive a complete return on your investment at the conclusion of the term. Naturally, throughout this time you continue to receive your set monthly salary. What happens, though, if you need to remove the money before 5 years?
- If you take the money back within a year, you get nothing.
- Withdraw the deposit in one to three years; you will receive a refund back after a nominal 2% deduction (as a penalty)
- Withdraw the deposit after three years; a nominal 1% reduction will be made from it (as a penalty).
Post Office Monthly Income Scheme Disadvantages
- The Post Office Monthly Income Scheme does not provide a section 80C tax rebate. Simply put, you cannot deduct the cost of your POMIS investment.
- The monthly payouts lay inert and produce no interest if they are not withdrawn.
- The interest income is taxable in your hands even though there is no TDS applied to the Post Office MIS.
Post Office Monthly Income Scheme Eligibility Requirements
POMIS was created for risk-averse investors looking for a consistent source of monthly payments but strongly opposing equities instruments. Senior seniors and retired individuals who have just entered the no-paycheck zone and are prepared to make a one-time investment with the sole goal of obtaining a safe recurring income in order to continue their lifestyle are best suited for it. Simply expressed, the Post Office Monthly Income Scheme is for people who want a reliable source of income for the long term.
The investor must only be an Indian resident in order to invest. Investments in the Post Office Monthly Income Scheme are not permitted from NRIs. The reduced entry age cap of 10 years is the main feature of this post office savings program. Therefore, a juvenile as young as 10 years old can register a POMIS account in his name. A minor may only invest up to a certain amount.
How to Register for a POMIS Account ?
It’s not difficult to open a POMIS account. Read the steps below to know how to open the POMIS account.
- If you don’t already have one, open a post office savings account.
- Pick up an application for POMIS at the post office.
- At the post office, turn in the properly completed form, a photocopy of your ID, residential documentation, and two passport-size pictures. Carry the originals with you for verification.
- Obtain the witness’s or nominees’ signatures on the form.
- Pay the down payment in cash or by check. A post-dated check will have the account opening date as the date printed on it.
- The Post Office executive will give you the specifics of your newly opened account once the processing is complete.
Repercussions of an Early Withdrawal
| Time of POMIS withdrawal | Outcomes of premature withdrawal |
| Before completing one year | Zero benefits |
| Between 1st and 3rd year | Entire deposit refunded after deducting a 2% penalty |
| Between 3rd and 5th year | Entire corpus refunded with 1% penalty |
Who is a POMIS investor?
Despite its limited tax benefits, POMIS has the adaptability and dependability that attract risk-averse investors. If you believe you fall into such a category, you should think about beginning one right away.
Post Office Monthly Income Scheme FAQ’s
How is the stake of a single account holder in a joint account determined? There will be an equal portion in each joint account for each joint account holder. What if, at account maturity, I decide not to withdraw the deposit amount? If you don’t take your deposit money out when it matures, it will remain in the account for a period of two years after that and continue to earn simple interest in accordance with Post Office Savings Account rules. Is this programme appropriate for senior citizens? Yes. Senior citizens would benefit from this programme since they can deposit their entire life savings into the account and earn interest to cover their monthly costs. What would happen to my account if I have to relocate because of my job? If you move from one city to another, it is simple and free to transfer your POMIS account to the Post Office in the new location.