What is Post Office Monthly Income Scheme?
The Post Office Monthly Income Scheme (MIS) is a term deposit account provided by India Post. It offers monthly interest payouts, making it an ideal choice for individuals seeking a regular or additional income from their investments.
This is a type of investment plan that is offered by the Department of Posts , also known as India Post. Those who would like to invest in Post Office monthly income schemes can do so at any post office in their respective locality. As of April 2023, the interest rate offered on the Post Office Monthly Income Scheme is 7.40% p.a
The minimum amount to open the account must be in multiples of Rs. 1000. The maximum investment limit is Rs. 9 lakh for a single account and Rs. 15 lakh for a joint account. An individual can invest a maximum of Rs. 9 lakh in Monthly Income Scheme (MIS), including their share in joint accounts. In joint accounts, each account holder has an equal share in each joint account when calculating the individual's share.
Post Office Monthly Income Scheme Interest Rates
Given below are the revised interest rates offered on Post Office MIS schemes :
Tenure | Regular rate (per annum ) |
5 years | 7.40% |
- The interest rate that is paid on the Post Office Monthly Income Scheme is 7.40% p.a. for an investment period of 5 years.
- The rate of interest paid is not applicable to senior citizens and those who belong to this category can invest in the Senior Citizens Savings Scheme (SCSS).
Features & Benefits of the Post Office Monthly Income Scheme (POMIS)
- Capital Protection: Your investment remains secure until maturity, as this is a government-backed scheme.
- Tenure: The lock-in period is 5 years. Upon maturity, you can either withdraw or reinvest the amount.
- Low-risk Investment: Being a fixed-income scheme, it offers safety from market fluctuations.
- Affordable Deposit: Begin with a minimum investment of Rs. 1,000, and invest further in multiples of this amount. The maximum deposit limit is Rs. 9 lakh for a single account and Rs. 15 lakh for a joint account.
- Guaranteed Returns: Monthly interest payouts offer a steady income. Though not inflation-beating, returns are higher than many fixed-income options like fixed deposits (FDs).
- Tax Efficiency: While the investment is not eligible for Section 80C deductions, no TDS is applied to the interest.
- Payouts: Interest is disbursed monthly, starting one month after the initial investment.
- Multiple Accounts: Individuals can open multiple accounts, provided the combined deposits do not exceed Rs. 9 lakh.
- Joint Accounts: Open a joint account with up to three members, allowing a collective maximum deposit of Rs. 15 lakh.
- Fund Transfer: Recently, funds can be moved into a recurring deposit (RD) account to earn additional interest and returns.
- Nominee Facility: Nominate a beneficiary to claim the corpus and benefits in case of the investor’s demise during the scheme’s tenure.
- Ease of Transactions: Collect interest directly from the post office or transfer it to a savings account. Reinvestment into a SIP is also an option.
- Reinvestment Option: Post maturity, the corpus can be reinvested in the same scheme for another 5-year term to continue earning benefits.
Eligibility Criteria for Post Office Monthly Income Scheme
The eligibility criteria to open a Post Office MIS account are as follows:
- You must be a resident of India.
- Minors aged 10 years and above can open an account in their names.
- A guardian can open the account on behalf of minors below 10 years of age.
- A joint account can be opened with a maximum of three individuals.
- A guardian can open the account on behalf of an individual of unsound mind.
Documents Required for Post Office Monthly Income Scheme
The documents required to open a Post Office MIS account are listed below:
- Application form
- Proof of identity: Aadhaar card/Voter ID/Passport etc.
- Proof of address: Latest utility bills/Passport/PAN card etc.
- Passport size photographs
How to Open a Post Office Monthly Income Scheme Account
Opening a Post Office Monthly Income Scheme (POMIS) account is simpler than you might think. Follow these steps:
- Post Office Savings Account: Ensure you have a post office savings account; if not, open one.
- Application Form: Collect the POMIS application form from your local post office.
- Submit Documents: Fill out the form and submit it along with:
- Photocopies of your ID and residential proofs.
- Two passport-size photographs.
- Original documents for verification.
- Witness or Nominee: Get the form signed by your witness or nominee(s).
- Initial Deposit: Make the initial deposit through cash or cheque. For post-dated cheques, the date on the cheque will be considered the account opening date.
- Account Confirmation: Once processed, the post office executive will provide details of your newly opened account.
Consequences of Early Withdrawal from Post Office Monthly Income Scheme
Time of Withdrawal | Penalty or Refund Details |
Before one year | No benefits. |
One year to three years | Full deposit refunded with a 2% penalty. |
Three years to five years | Full corpus refunded with a 1% penalty. |
Comparing Post Office Monthly Income Scheme with Other Monthly Income Plans
Features | Post Office Monthly Income Scheme | Monthly Income Mutual Fund | Monthly Income Insurance |
Returns | Assured at 7.40% p.a. | No guaranteed income; depends on 20:80 equity-debt ratio. | Monthly annuities; rates depend on premiums & term. |
TDS | Not applicable. | Applicable. | Annuity income taxed. |
Rate Type | Fixed. | Floating; varies with market movement. | NA. |
Risk | Low-risk; suitable for risk-averse. | High-risk; ideal for risk-takers. | Offers both investment and insurance benefits. |
Withdrawal | Allowed after 12 months with penalties. | Exit load applies for early withdrawal. | Higher surrender charges due to long-term nature. |
Investment Limit | Rs. 9 lakh for single account.Rs. 15 lakh for joint account. | No limit. | No limit. |
Post Office Monthly Income Scheme Interest Rate History
The Finance Ministry and the Central Government of India determine the interest rate for the Post Office Monthly Income Scheme. These interest rates are periodically reviewed and adjusted every quarter based on the returns generated by government bonds of comparable duration.
The table below presents the current and past interest rates:
Period | POMIS Interest Rate |
1 April 2023 to 30 June 2023 | 7.40% p.a. |
1 January 2023 to 31 March 2023 | 7.10% p.a. |
1 October 2022 to 31 December 2022 | 7.10% p.a. |
1 April 2020 to 30 September 2020 | 6.60% p.a. |
1 January 2020 to 31 March 2020 | 7.60% p.a. |
1 October 2019 to 31 December 2019 | 7.60% p.a. |
1 July 2019 to 30 September 2019 | 7.60% p.a. |
1 January 2019 to 31 March 2019 | 7.70% p.a. |
1 October 2018 to 31 December 2018 | 7.70% p.a. |
1 January 2018 to 30 September 2018 | 7.30% p.a. |
1 October 2017 to 31 December 2017 | 7.50% p.a. |
1 July 2017 to 30 September 2017 | 7.50% p.a. |
1 April 2017 to 30 September 2017 | 7.60% p.a. |
FAQs on Post Office Monthly Income Scheme
- What is the minimum balance that needs to be maintained in an MIS account?
A minimum balance that needs to be maintained in an MIS account is Rs.1,500.
- What are the other types of accounts that can be opened at India Post?
The types of accounts that can be opened at India Post are Post Office Savings Account, 5-Year Post Office Recurring Deposit Account, Post Office Time Deposit Account, Senior Citizens Savings Scheme, 15-year Public Provident Fund Account, National Savings Certificate, Kisan Vikas Patra, and Sukanya Samriddhi Accounts.
- Is a nomination facility available for Post Office Monthly Income Scheme?
Yes, a nomination facility is available for Post Office Monthly Income Scheme.
- Can a single account be converted into a joint account?
Yes, a single account be converted into a joint account. The vice-versa can also be done.
- What is the minimum period for which a deposit should be held before making a premature withdrawal?
The minimum period for which a deposit should be held before making a premature withdrawal is 12 months.
- How can a nominee or legal heir claim the money of the deceased deposit holder?
The nominee can furnish the death certificate and claim the maturity amount that is entitled to him/her. In case there is no nominee, the legal heir can make a claim on the same.
- In the case of joint accounts, what will be the share that is given out to each account holder?
The sharing will be made on a 50:50 basis. This means that each depositor in a joint account will get an equal share.
- Is it possible to transfer the account from one post office to another?
Yes, transfer of the account from one post office to another is possible.
- What is the penalty rate for premature withdrawal?
The penalty rate for premature withdrawal is at 2%
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