The Post Office Monthly Income Scheme(POMIS) is one of many banking products and services offered by the Post Office, which is part of the Finance Ministry’s scope. Hence, it is highly trustworthy. It is a low-risk MIS that delivers consistent revenue. You can invest up to Rs. 9 lakh individually or Rs. 15 lakh collectively, with a five-year investment period.
There are a lot of different plans that offer set returns on investment through the Post Office Depository Service. The sovereign guarantee backs all of these plans, which means that this way of spending is backed by the government. Because of this, these schemes are safer ways to invest than stocks and a lot of fixed-income choices. The Post Office Monthly Income Scheme is one of the best plans for Investments.
What is the Post Office Monthly Income Scheme?
With an interest rate of 7.4%, the Post Office Monthly Income Scheme is one of the best ways to make money. It includes the Post Office Savings Account, the Post Office Recurring Deposit, and the Post Office Time Deposit.
As the name says, the interest on this plan is paid out every month. Just like other post office plans, this one is approved by the Ministry of Finance.
Top Benefits or Features of Post Office Monthly Income Scheme (POMIS)
Here the the significant features of the Post Office Monthly Income Scheme 2024
- Lock-in Period: If you open a Monthly Income Scheme account at the post office, you can’t take out the money you put in it before 5 years have passed.
- maximum investment: The maximum amount that you may invest in the plan is 9 Lakhs. You can use the plan at more than one post office, but the total amount of money you deposit cannot be more than 9 Lakhs. You can also start a joint account with two or three other people. This account can hold up to Rs 15 lakhs in total investments.
- Transferrable: In case, you are changing your residential status to a different city anywhere in India, you can move your POMIS account to a convenient post office. Your Post Office Monthly Income Scheme investment corpus and interest disbursal will be brought forward to such a post office.
- Joint account: A maximum of 3 individuals can start a joint account for this scheme. In the case of joint accounts, each investor holds equal rights over the account. The highest limit in the case of joint accounts is Rs. 15 Lakhs, and the singular limit is Rs. 9 Lakhs.
- Minor account: You can start a POMIS minor account in the name of your child. The Post Office Monthly Income Scheme age limit for children is above 10 years. He/she can take the amount after maturing for 18 years.
- Eligible residential status: Every Indian citizen is eligible to start a POMIS account; however, NRI individuals cannot.
- Auto-withdrawal: You can take 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 moved 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, based on the time of such redemption.
- Investment amount: The account can be started 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 receive any tax benefits under Section 80C.
The table below shows the maximum investment limit for the Post Office Monthly Income Scheme.
| Interest payable, Rates, Periodicity, etc. | Minimum Amount for opening of account and maximum balance that can be retained |
|---|---|
| From 01.01.2024, interest rates are as follows:-7.4 % per annum payable monthly. | In multiples of INR 1000/- |
| The maximum investment limit is INR 9 lakh in single account and INR 15 lakh in a joint account | |
| An individual can invest a maximum of INR 9 lakh in MIS (including his share in joint accounts) | |
| The maximum investment limit is INR 9 lakh in a single account and INR 15 lakh in a joint account |
How to Open a Post Office Monthly Income Scheme (POMIS) Account?
Opening a Post Office Monthly Income Scheme Account (MIS) is simple and straightforward. To invest in the scheme, you must have a Post Office Savings Account. After creating a savings account with the Post Office (assuming you did not previously have one), you can follow the following POMIS Account-creating Procedure:
- Submit the form with the following documents: a photocopy of your ID, a photocopy of your address, and two passport-size pictures.
- Submit the originals of the aforementioned documents for verification reasons.
- Collect signatures from witnesses or beneficiaries. and congratulation your
You can invest the capital amount using a dated cheque. The date on the cheque will be used as the account opening date. The interest received on the investment will be paid out one month after the opening date.
The beneficiary can also be nominated after opening the Post Office Monthly Income Scheme in India account.
Current and Previous Interest Rates of Post Office Monthly Income Scheme
| 01-04-2015 | 31-03-2016 | 8.40 |
| 01-04-2016 | 30-09-2016 | 7.80 |
| 01-10-2016 | 31-03-2017 | 7.70 |
| 01-04-2017 | 30-06-2017 | 7.60 |
| 01-07-2017 | 31-12-2017 | 7.50 |
| 01-01-2018 | 30-09-2018 | 7.30 |
| 01-10-2018 | 31-12-2018 | 7.70 |
| 01-01-2019 | 31-03-2019 | 7.70 |
| 01-04-2019 | 30-06-2019 | 7.70 |
| 01-07-2019 | 30-09-2019 | 7.60 |
| 01-10-2019 | 31-12-2019 | 7.60 |
| 01-01-2020 | 31-03-2020 | 7.60 |
| 01-04-2020 | 30-09-2022 | 6.60 |
| 01-10-2022 | 31-12-2022 | 6.70 |
| 01-01-2023 | 31-03-2023 | 7.10 |
| 01-04-2023 | 31-03-2024 | 7.40 |
Who Can Open a POMIS Account?
- A single adult
- Joint Account (up to 3 adults) (Joint A or Joint B)
- A guardian on behalf of a minor/ person of unsound mind
- A minor above 10 years in his name.
Benefits of Post Office Monthly Income Scheme
There are two major benefits to investing in POMIS. Because it is not a market-linked investment scheme and is insured by the government, it is a popular choice for many individuals with low risk.
These benefits are –
- Stable Returns: Your investment will generate consistent monthly income, regardless of market changes. The post office has determined an interest rate of 7.40% per annum.
- Reinvestment: Consider high-profit-yielding instruments like equities shares or funds, but keep in mind that these investments come with a higher risk.
Pre-mature closure of account Penalty
Here are the penalty regulations applied to Post Office Monthly Income Scheme premature closure
(i) No deposit shall be withdrawn before the expiry of 1 year from the date of deposit.
(ii) If the account is closed after 1 year and before 3 years from the date of account opening, a deduction equal to 2% from the principal will be deducted and the remaining amount will be paid.
(iii) If the account is closed after 3 years and before 5 years from the date of account opening, a deduction equal to 1% from the principal will be deducted and the remaining amount will be paid.
(iv) The Account can be prematurely closed by submitting the prescribed application form with passbook at the concerned Post Office.
Frequently Asked Questions
Which is the best scheme for monthly income in the post office?
The Post Office Monthly Income Scheme (POMIS) is a small savings initiative sponsored by the Government of India that allows the investor to save a certain sum each month.
Who can open POMIS?
(i) a single adult
(ii) Joint Account (up to 3 adults) (Joint A or Joint B)
(iii) a guardian on behalf of a minor/ person of unsound mind
(iv) a minor above 10 years in his name.
What is the POMIS investment limit in 2024?
For an individual account, the maximum deposit limit under POMIS is 9 lakhs, while for a joint account, it is 15 lakhs.
Can the nominee withdraw the funds in the event of the investor’s death before maturity?
Yes, nominees can apply for death compensation immediately following the death of the Post Office Monthly Income Scheme (POMIS) investor, even if the 5-year lock-in period has not expired. They can file a death claim and receive a return on the investment amount and interest earned till death.
What is the Early Withdrawal Penalty for the Post Office Monthly Income Scheme?
(i) No deposit may be taken out before the first anniversary of the deposit date.
(ii) A deduction equivalent to 2% of the principal will be made and the remaining amount will be paid if the account is closed after a year but before three years from the date of opening.
(iii) A deduction equivalent to 1% of the principal will be made and the remaining amount will be paid if the account is closed after three years but before five years from the date of account opening.
(iv) The account may be closed early by bringing the required application form and passbook to the relevant post office.