Post Office Monthly Income Scheme (POMIS) – Interest Rate 2023
POMIS (full form – Post Office Monthly Income Scheme) is a popular savings scheme offered by the Indian Postal Service. The scheme aims to provide a fixed monthly income to investors seeking a regular source of income. You can open a POMIS account with just Rs.1,000. The lock-in period (maturity period) is 5 years and the current POMIS interest rate stands at 7.40%.
POMIS Union Budget 2023: Finance Minister Nirmala Sitharaman has proposed to increase the maximum investment limit in POMIS from Rs.4.5 lakh to Rs.9 lakh for a single account and up to Rs.15 lakh for a joint account.
Post Office MIS Details
| Interest Rate | 7.40% |
| Minimum Amount | Rs.1,000 |
| Maximum Amount | Rs.9 lakh (for a single account)* Rs.15 lakh (for joint account) |
| Lock-in Period | 5 years |
| Eligibility | Indian Resident above 10 years |
| Tax Benefits | Nil |
| Penalty Fee or Premature Withdrawal | 1% – 2% (depending on the timeframe) |
Post Office Monthly Income Scheme (POMIS)
Post Office Monthly Income Scheme is a savings scheme launched by the Department of Post. Depositors/investors can open a POMIS account with a deposit of Rs.1,000. The current interest rate of POMIS stands at 7.40% interest rate. The interest is paid at the end of each month from the account’s opening date until it achieves maturity.
Post Office MIS Interest Rate 2023
Post Office Monthly Income Scheme interest rates are subject to change. For instance, from January 2023 to March 2023, the Post Office MIS interest rate is set at 7.4%. However, between January and March 2023, the interest rate was 7.10%, between October 2022 and December 2022, the interest rate was 6.70%, and between April 2021 to September 2022, it was fixed at 6.60%.
Documents Required for Opening a POMIS Account
As mentioned above, you are required to submit certain documents while applying for the scheme. They are:
1. Identity Proof
Government-issued ID such as Aadhar, passport, voter ID, and driving licence can be submitted.
2. Address Proof
Certain government-issued IDs that contain your address can be submitted. Else, you can provide your recent utility bills.
3. Passport-size Photographs of Applicants
In case of a joint account, documents and photographs of all three individuals are required.
Post Office MIS Eligibility Criteria
- Nationality: Indian resident
- Age: Above 18 years. However, you can also open a minor account for kids aged 10 years or above. Note that for a minor account, the amount can only be withdrawn once they turn 18.
How to Open a POMIS Account?
Follow the steps below to open a Post Office Monthly Income Scheme account:.
- Step 1
Visit a post office and ask for a POMIS account application form. You can also download the application form online.
- Step 2
Fill out and submit the form. You may need to provide certain documents for verification.
- Step 3
In case you want to add a nominee to your plan, mention their correct details in the form.
- Step 4
Arrange for the signatures of the nominees and witnesses.
- Step 5
To initiate the services, make your first deposit through cash or cheque.
*Note that the minimum deposit that needs to be made is Rs.1,000
Post Office Monthly Income Scheme Maximum Investment Amount
| Type of Account | Maximum Limit |
| Single Account | Rs.9 lakh |
| Joint Account | Rs.15 lakh |
POMIS Premature Withdrawal Rules
- Before 1 Year: NA
- Before 3 Years: Complete withdrawal allowed with 2% deduction on the deposit is levied
- After 3 Years, Before 5 Years: Complete withdrawal allowed with 1% deduction on the interest
How Does the Post Office Monthly Income Scheme Work?
Investors pay a specific amount of money towards this scheme every month with the minimum amount being Rs.1,000. However, the maximum balance in a single POMIS account is capped at Rs.9 lakh. For a joint account, the maximum amount is Rs.15 lakh. Three types of accounts are available under this scheme – single account, joint account and minor account.
Interest is added to this savings amount and paid back to the investor on a monthly basis. You can become a part of this plan by visiting your nearest post office and filling out the relevant application form.
Upon opening the account type of your choice, the instalments are to be paid every month.
Following the standard Post Office MIS tenure of 5 years, investors have two options: leave the accumulated sum in the account or withdraw the entire amount for reinvestment or spending purposes.
Features of Post Office Monthly Income Scheme (POMIS)
Some of the features of POMIS are as follows:
1. Deposit Amount
Minimum deposit of Rs. 1,000 and in multiple of Rs.1,000. Maximum deposit of Rs.9 lakh is allowed (single account). For a joint account, you can deposit up to Rs.15 lakh.
2. Nature of Interest Payment
Interest is paid on a monthly basis. The current interest rate stands at 7.40%.
3. Easily Transferable
This scheme can be transferred from one Post Office to another without any extra charges.
4. Nominee Facilities
Investors can assign nominees to their savings accounts. In the event of their unfortunate demise, the sum saved under this scheme will be disbursed to the nominee.
5. Safer Investment Option
As the Government of India backs the investment model, rest assured that there’s minimal risk.
6. Maturity or Lock-in Period
As per rules, from December 1, 2011, the POMIS scheme comes with a maturity period of 60 months or five years, calculated from the account opening date.
7. Type of Accounts
The three types of accounts are single, joint, and minor.
8. Penalty Charges on Premature Withdrawal
You can withdraw funds after the completion of 1 year. However, if the funds are withdrawn before 3 years, a deduction of 2% on the deposit is applicable. If you withdraw funds after 3 years but before 5 years, a deduction of 1% on the deposit is applicable.
9. Tax Benefits Under POMIS
POMIS doesn’t provide any tax benefits under Section 80C of the Income Tax Act. Though TDS isn’t applicable, the interest income is taxable if it exceeds Rs.40,000.
10. POMIS Eligibility
Any Indian resident above 10 years old can open a Post Office MIS scheme account.
Also Read
Benefits of Post Office Monthly Income Scheme (MIS)
Here are some of the benefits of POMIS:
1. Account Flexibility
There is no limit on the number of accounts you can create under the Post Office MIS. Keep in mind that you cannot exceed the maximum cumulative balance across all accounts.
2. Assured Returns
With the Post Office Monthly Income Scheme, you are assured of a steady income independent of the market’s state and its related fluctuation..
3. Diversification and Reinvestment
You can diversify your portfolio with monthly income scheme investments. Given that the scheme offers a steady income, it works as a great tool to build capital for reinvestment.
Who Should Invest in POMIS?
POMIS is a good investment option for:
1. Senior Citizens
As POMIS provides a regular source of income, it can be a good investment option for senior citizens who are looking for a fixed income post-retirement.
2. Conservative Investors
POMIS is a low-risk investment option and is suitable for investors who want to invest in a safe and secure scheme without taking much risk.
3. Individuals with a Low-risk Tolerance
If you are someone who is risk-averse and is not comfortable with investing in the stock market or other high-risk investment options, then POMIS can be a good investment option for you.
4. Those Planning to Build a Stable Source of Income after Retirement
POMIS provides a fixed and regular source of income and is suitable for individuals who need a monthly income to meet their expenses post-retirement.
Post Office Monthly Income Scheme Vs Other Saving Schemes of the Post Office
| Post Office Monthly Savings Scheme | National Savings Certificate | Public Provident Fund (PPF) | Sukanya Samriddhi Account |
| 7.40% | 7.7% | Pre-mature withdrawal is allowed only in exceptional cases | 8% |
| Assured Returns | Assured Returns | Assured Returns | Assured Returns |
| 5 years lock-in period | 5 years lock-in period | 15 years lock-in period | 21 years from the date of account opening |
| Pre-mature withdrawal allowed after 1 year | Pre-mature withdrawal allowed only in exceptional cases | Pre-mature withdrawal allowed after the completion of 5 years | Pre-mature closure available only under special circumstances |
Final Word
The Post Office Monthly Income Scheme is a safe and dependable investment option. The monthly interest payouts and the flexibility in terms of account transfer through the widespread post office network in India make it an easy financial model to understand and operate.
Planning to invest in schemes that could give you inflation-beating returns? Invest in mutual funds with Navi Mutual Fund. Get access to a wide range of low-cost mutual fund schemes, select your preferred scheme and start investing with as low as Rs.10.
FAQs
Yes, you can transfer your Post Office Monthly Income Scheme to a post office of your choice and convenience with no additional charges.
Post Office Monthly Income Scheme does attract any Tax Deducted at Source. The scheme also does not extend any tax benefits under Section 80C of the Income Tax Act.
Yes, all Indian citizens above 18, including senior citizens, can invest in the Post Office Monthly Income Scheme.
To start a Post Office Monthly Income Scheme account, your deposit should be at least Rs.1,000.
The maximum investment amount varies depending on the account. For a minor’s account, it is Rs.3 lakh, and for individual accounts, the limit is Rs.4.5 lakh. For joint accounts, the limit is set at Rs.9 lakh.
The current interest rate of the POMIS scheme stands at 7.4%.
Though no TDS is applicable, the interest income on POMIS is taxable.
POMIS could be a good investment for those planning to build their retirement corpus. It helps provide a fixed source of income and is useful for those who want to invest their savings in a safe and secure scheme
Both MIS and FD have similar investments and are popular investment options. However, the choice between the two depends on your investment goals and risk appetite. Currently, Post Office MIS offers an interest rate of 7.4% whereas FD interest rate could go up to 8%. Also, FDs come with a tenure of 7 – 10 years, whereas POMIS comes with a lock-in period of 5 years. FD interest rates are slightly prone towards market fluctuations compared to MIS. Consider all these factors before investing in either of the investment vehicles.
After the maturity period, the account will be automatically closed, and the invested amount along with the accumulated interest will be credited to the investor’s savings account. No interest is paid after maturity. If the interest earned on POMIS exceeds Rs.40,000 per year, TDS (Tax Deducted at Source) will be applicable as per the Income Tax rules.
