For couples and individuals seeking a secure investment option that provides steady monthly income, the Post Office Monthly Income Scheme (POMIS) is an ideal government-backed savings plan. With attractive interest rates and a one-time deposit structure, it offers a guaranteed return every month for five years. This scheme is especially beneficial for retirees, senior citizens, and conservative investors who prioritize capital safety and fixed income.
In this detailed guide, you’ll learn everything about the POMIS, including interest rates, deposit limits, account types, and how much monthly income you can earn through this plan. Let’s explore this safe and effective saving scheme in depth.
Table of Contents
Short Summary: Post Office Monthly Income Scheme (POMIS)
Feature |
Details |
|---|---|
Scheme Name |
Post Office Monthly Income Scheme (POMIS) |
Minimum Investment |
₹1,000 |
Maximum Investment (Single) |
₹9 lakh |
Maximum Investment (Joint) |
₹15 lakh |
Interest Rate |
7.4% per annum (as of latest update) |
Interest Payout |
Monthly (credited to Post Office Savings Account) |
Account Types |
Single, Joint (up to 3 adults), Minor (via Guardian) |
Lock-in/Maturity Period |
5 years |
Premature Withdrawal |
Allowed with conditions |
Account Extension |
Can be extended for another 5 years after maturity |
Tax Benefits |
No Section 80C benefit; interest is taxable |
Official Website |
What is the Post Office Monthly Income Scheme (POMIS)?
POMIS is a small savings scheme offered by the Indian Postal Department. It is designed to provide investors with a fixed monthly income. By making a one-time deposit, the investor earns interest every month at a fixed annual interest rate, credited monthly.
This scheme is fully backed by the Government of India, making it one of the safest investment options available in the country. Investors can choose to open the account individually or jointly.
Investment and Returns: How Much Can You Earn?
One of the main attractions of POMIS is its fixed monthly income. The interest is calculated annually and distributed equally each month. Below is a breakdown of earnings based on the investment amount.
For Joint Account (Maximum ₹15 lakh Investment)
- Interest Rate: 7.4% per annum
- Annual Interest: ₹1,11,000
- Monthly Income: ₹9,250
For Single Account (Maximum ₹9 lakh Investment)
- Interest Rate: 7.4% per annum
- Annual Interest: ₹66,600
- Monthly Income: ₹5,550
These returns are fixed and do not fluctuate with market conditions, which makes the scheme ideal for risk-averse investors.
Who Can Open a POMIS Account?
The scheme is open to a wide range of Indian residents. The following types of accounts can be opened under POMIS:
- Single Account – Any Indian adult can open this account in their name.
- Joint Account – A maximum of 3 adults can jointly open a POMIS account. The investment and interest are shared equally among the account holders.
- Minor Account – Guardians can open an account on behalf of a minor. A minor above the age of 10 can also operate the account in their name.
Deposit Rules and Investment Limits
- The minimum deposit to open a POMIS account is ₹1,000.
- Deposits must be made in multiples of ₹1,000 only.
- Single Account: Maximum deposit limit is ₹9 lakh.
- Joint Account: Maximum limit is ₹15 lakh collectively. Each account holder will have an equal share in the investment.
- There is no limit on the number of accounts, but the total deposit across all accounts (including individual and joint) must not exceed the prescribed limit.
Interest Payout and Account Handling
- Interest earned under POMIS is credited monthly to the investor’s linked Post Office Savings Account.
- If the interest is not withdrawn, it remains in the savings account and earns interest at the applicable savings account rate.
- No compounding of interest happens within POMIS itself; monthly payouts are flat.
Maturity and Account Extension
- The scheme has a maturity period of 5 years.
- After the 5-year period, the investor can either withdraw the principal or extend the account for another 5 years with the prevailing interest rate at the time of extension.
- No further deposits can be made during the extended period.
Premature Withdrawal Rules
Premature closure of the account is allowed under certain conditions:
- After 1 year but before 3 years: Deduction of 2% from the principal amount.
- After 3 years but before 5 years: Deduction of 1% from the principal amount.
- No deduction is made if the account is closed after the 5-year maturity period.
Tax Implications
- POMIS does not offer any tax deduction under Section 80C of the Income Tax Act.
- The interest earned is fully taxable in the hands of the investor as per their applicable income tax slab.
- No TDS (Tax Deducted at Source) is deducted by the post office, but the investor must declare this income in their annual income tax return.
How to Open a POMIS Account?
You can open a POMIS account by visiting your nearest post office branch with the following documents:
Documents Required
- Duly filled POMIS Account Opening Form
- Two passport-size photographs
- Identity proof (Aadhaar card, PAN card, Voter ID, etc.)
- Address proof (Utility bills, Aadhaar, Passport, etc.)
- PAN Card (Mandatory for deposits over ₹50,000)
- KYC documents (as required by the Post Office)
Steps to Open the Account
- Visit your nearest India Post branch.
- Fill the POMIS account opening form.
- Submit the necessary documents.
- Make your deposit via cash, cheque, or demand draft.
- Link your Post Office Savings Account for interest credit.
Advantages of POMIS
- 100% capital safety as it is government-backed.
- Fixed monthly income ideal for retired individuals or conservative investors.
- Easy to open and operate from any post office in India.
- Option for joint investment increases deposit cap and returns.
- Minimal risk with assured returns.
Disadvantages of POMIS
- Interest is fully taxable with no tax rebate.
- Returns are lower compared to market-linked instruments like mutual funds.
- No compounding benefits – interest is paid monthly, not reinvested.
- Lock-in period of 5 years with penalties for early withdrawal.
FAQs about Post Office Monthly Income Scheme (POMIS)
1. Can NRIs invest in POMIS?
Ans. No, Non-Resident Indians (NRIs) are not eligible to invest in POMIS.
2. Is TDS applicable on POMIS?
Ans. No, TDS is not deducted on POMIS interest. However, it is taxable income.
3. Can I transfer my POMIS account to another post office?
Ans. Yes, POMIS accounts are transferable between post offices.
4. What happens if I don’t withdraw the monthly interest?
Ans. The interest remains in the linked Post Office Savings Account and continues to earn interest at the applicable rate.
5. Can I open multiple POMIS accounts?
Ans. Yes, you can open multiple accounts, but the total combined investment should not exceed the maximum limit (₹9 lakh single / ₹15 lakh joint).
6. Can I extend my account after maturity?
Ans. Yes, the account can be extended for another 5 years at the prevailing interest rate at the time of extension.
Conclusion
The Post Office Monthly Income Scheme (POMIS) is a reliable investment option for those looking for fixed and risk-free income. It may not offer high returns like market-linked instruments, but it provides safety, consistency, and ease of use—especially for retirees, homemakers, or conservative investors. With the ability to invest jointly and earn up to ₹9,250 per month, this scheme deserves consideration for anyone seeking a stable monthly payout with government security.
Official Website: https://www.indiapost.gov.in
For More Information Click Here
