Post office depository service has a wide assortment of schemes that offer fixed returns on investment. These schemes are all stringed with the benefit of the sovereign guarantee, i.e. this investment avenue is government-backed. Therefore, these schemes are safer investment options compared to equity shares and many fixed-income options.
Latest Update:
Budget 2023-24: The maximum deposit limit for the monthly savings scheme is enhanced from Rs.4.5 lakh to Rs.9 lakh for a single account and from Rs.9 lakh to Rs.15 lakh for a joint account.
Like any nationalised bank, the Post Office has been a trusted place for depositing and transacting with money. This is especially true for the elder generation. A number of saving schemes are offered by branches of the Post Office across the country.
Post Office Monthly Income Scheme (POMIS) is one such scheme where you invest a certain amount and earn a fixed interest every month. As the name suggests, you can invest in this from any post office. In this article, we will cover the following aspects of POMIS.
What is Post Office Monthly Income Scheme
Post Office Monthly Income Scheme, amongst others such as Post Office Savings Account, Post Office Recurring Deposit, Post Office Time Deposit, is one of the highest-earning schemes with an interest rate of 7.4%.
The interest in this scheme, as the name suggests, is disbursed monthly. This scheme, like other post office schemes, is recognized and validated by The Ministry of Finance.
Features of POMIS
Here the the significant features of the Post Office Monthly Income Scheme 2024–
- Lock-in Period: When you open a Monthly Income Scheme account with a post office, you cannot withdraw the amount deposited in such account prior to 5 years.
- Maximum Limit: You can make a maximum investment of Rs. 9 Lakhs in the scheme. Even if you hold the scheme in multiple post offices, the aggregate of all your deposits cannot exceed Rs. 9 Lakhs.
You can also open a joint account with 2 or 3 people wherein an aggregate sum of up to Rs 15 lakhs can be invested in this account. - Transferrable: In case, you are changing your residential status to a different city anywhere in India, you can transfer your POMIS account to a convenient post office. Your Post Office Monthly Income Scheme investment corpus and interest disbursal will be carried forward to such a post office.
- Joint account: A maximum of 3 individuals can open a joint account for this scheme. In the case of joint accounts, each investor possesses equal rights over the account. The maximum limit in the case of joint accounts is Rs. 15 Lakhs, and the singular limit is Rs. 9 Lakhs.
- Minor account: You can open a POMIS minor account in the name of your child. The Post Office Monthly Income Scheme age limit for minors is above 10 years. He/she can withdraw the amount after maturing for 18 years.
- Eligible residential status: Every Indian citizen is eligible to open a POMIS account; however, NRI individuals cannot.
- Auto-withdrawal: You can opt to withdraw the monthly interest amount on your investment through automatic transfer to your savings account through PDCs or ECS. If the POMIS account is with a CBS Post Office, then the interest amount can be directed towards any other CBS centric savings account.
- Penalty: In case you wish to withdraw your investment corpus before the lapse of the lock-in period, a penalty is charged on the withdrawal amount, depending on the time of such redemption.
- Investment amount: The account can be opened with a minimum of Rs. 1000 and in multiple of Rs. 1000.
- Tax benefits: The interest amount does not incur any Tax Deducted at Source (TDS); however, it also does not attract any tax benefits under Section 80C.
The following table demonstrates the maximum investment limit for the Post Office Monthly Income Scheme.
Account Type | Maximum Limit |
Single Account | Rs. 9 Lakhs |
Joint Account | Rs. 15 Lakhs |
Documentation Required
Identity Proof: Copy of government-issued Identity card such as Passport /PAN card/ Voter ID card / Driving License/Aadhaar, etc.
Address Proof: Copy of government issued ID or recent utility bills.
Photographs: Passport size photograph.
Eligibility Criteria
- The investor should be a resident Indian.
- The minimum age limit of the investor should be ten years and above ten years of age.
- The maximum fund that a minor can invest is Rs.3,00,000.
- The NRI is not eligible to invest in the Post Office Monthly Scheme.
Current Interest Rates on Post Office Monthly Income Scheme
The Post Office Monthly Income Scheme’s rate of interest is fixed by the Finance Ministry and the Central Government of India. The interest rates are often revised every quarter depending on the returns generated by government bonds of similar tenure.
The following table includes the current and previous interest rates-
Time Interval | POMIS Interest Rate (Per Annum) |
From 1st January 2024 | 7.40% |
1st October 2023 – 31st December 2023 | 7.40% |
1st April 2023 – 30th June 2023 | 7.40% |
1st January 2023 – 31st March 2023 | 7.10% |
1st October 2022 – 31st December 2022 | 7.10% |
1st April 2020 – 30th September 2020 | 6.60% |
1st January 2020 – 31st March 2020 | 7.60% |
1st October 2019 – 31st December 2019 | 7.60% |
1st July 2019 – 30th September 2019 | 7.60% |
1st January 2019 – 31st March 2019 | 7.70% |
1st October 2018 – 31st December 2018 | 7.70% |
1st January 2018 – 30th September 2018 | 7.30% |
How to open a POMIS Account
Opening a POMIS account is not as tedious as you think. Instead of imagining long queues and even longer paperwork, please take a look at the step-by-step procedure.
- Open a post office savings account, if you haven’t already.
- Collect a POMIS application form from your Post Office.
- Submit the duly filled form along with a photocopy of your ID and residential proofs and 2 passport-size photos at the Post Office. Do carry the originals for verification.
- Get the signatures of your witness or nominee(s) on the form.
- Make the initial deposit via cash or cheque. In the case of a post-dated cheque, the date on the cheque will be the account opening date.
- Once the processing is done, the executive at Post Office will provide you with the details of your newly opened account.
Consequences of 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 |
Comparing Post Office MIS with other Monthly Income Plans
| POMIS | Monthly Income Mutual Fund | Monthly Income Insurance |
| Assured income at an annual rate of 7.40% | Invested in 20:80 equity-debt ratio and hence no guaranteed income | Monthly annuities (rates vary based on premiums & period) |
| No TDS | TDS applied | Annuity is taxed |
| Fixed return rate | Floating rate as per the market movement | NA |
| Low-risk, suitable for the risk-averse | Suitable for people with a high-risk appetite | Double benefits of investment & insurance |
| Withdrawal permitted after 12 months with penalty | Exit load applicable if withdrawn before time | Higher surrender charges as this is a long-term investment |
| Limit of Rs. 9 lakhs per account and Rs. 15 lakhs for a shared account | No investment limit | No investment limit |
FAQs
Can a POMIS 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.
What is the minimum balance that I need to maintain in a Post Office MIS scheme?
The minimum balance that needs to be maintained is Rs.1000.
How can a nominee or legal heir obtain the funds of a deceased depositor?
The nominee may present the death certificate and collect the maturity amount to which he or she is entitled. In the absence of a nominee, the legal heir may make a claim on the estate.
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