Post Office Monthly Income Scheme (POMIS) – Interest Rate & Features 2023

What is Post Office Monthly Income Scheme (POMIS)?

Post Office Monthly Income Scheme (POMIS) is a savings scheme offered by the Indian Post Office that provides fixed monthly income to investors. Deposits under the POMIS can be made in the range of Rs. 1500 to Rs. 4.5 lakhs. The interest earned and the deposit are both eligible for tax benefits as per the prevailing tax laws.

Post Office Monthly Income Scheme for senior citizens

The Post Office Monthly Income Scheme (POMIS) also has a special variant for senior citizens, which offers a slightly higher interest rate of 7.4% p.a. The other terms and conditions of the scheme remain the same as the regular POMIS. To be eligible for the senior citizen variant of the POMIS, the depositor must be at least 60 years of age. This scheme provides a regular and stable source of income for senior citizens and is considered to be a safe investment option.

Post Office Monthly Income Scheme: Interest Rate for POMIS 2023

The post office monthly income scheme offers an interest rate of 6.6% p.a., payable monthly, and has tenure of 5 years.

Post Office Monthly Income Scheme: Features

The features of the Post Office Monthly Income Scheme (POMIS) are:

• Fixed monthly income: POMIS provides a fixed monthly income to investors, with an interest rate of 6.6% p.a. for regular depositors and 7.4% p.a. for senior citizens.

• Tenure: The scheme has a fixed tenure of 5 years, after which the deposit can be renewed for another term.

• Deposits: Deposits under the POMIS can be made in the range of Rs. 1500 to Rs. 4.5 lakhs.

• Tax benefits: The interest earned and the deposit are both eligible for tax benefits as per the prevailing tax laws.
• Safety: The POMIS is considered to be a safe investment option as it is backed by the government of India.

• Availability: The POMIS is available through any post office in India.

• Joint accounts: Joint accounts are allowed under the POMIS, making it a suitable option for families.

• Nomination facility: The POMIS also provides a nomination facility, allowing depositors to nominate a person to receive the deposit in case of their death.

Post Office Monthly Income Scheme: Eligibility Criteria

The eligibility criteria for the Post Office Monthly Income Scheme (POMIS) are:

• Age: Any individual above the age of 10 years is eligible to invest in POMIS.
• Residency: Both Indian residents and non-resident Indians (NRIs) are eligible to invest in the POMIS.
• Deposits: Minimum deposit under the POMIS is Rs. 1500, and there is no maximum limit on deposits.
• Joint accounts: Joint accounts are allowed under the POMIS, but the minimum deposit for each joint account holder must be Rs. 1500.
• Senior Citizen variant: To be eligible for the senior citizen variant of the POMIS, the depositor must be at least 60 years of age.

Post Office Monthly Income Scheme: Who should invest?

The Post Office Monthly Income Scheme (POMIS) is suitable for:

• Senior citizens: The senior citizen variant of the POMIS offers a higher interest rate of 7.4% p.a. and provides a regular source of income to senior citizens.
• Low-risk investors: POMIS is considered to be a low-risk investment option, making it suitable for risk-averse individuals.
• Investors looking for stable income: With a fixed monthly income and low risk, the POMIS is suitable for individuals looking for a stable source of income.
• Investors with limited funds: POMIS allows for a minimum deposit of Rs. 1500, making it accessible to individuals with limited funds.
• Investors looking for tax benefits: The interest earned and the deposit are both eligible for tax benefits as per the prevailing tax laws, making it a suitable option for individuals looking to reduce their tax liability.

Post Office Monthly Income Scheme: Minimum and maximum investment limits

The minimum and maximum investment limits for the Post Office Monthly Income Scheme (POMIS) are:

• Minimum investment: The minimum investment under the POMIS is Rs. 1500.
• Maximum investment: There is no maximum limit on the deposit amount under the POMIS.

Post Office Monthly Income Scheme: Tax & Other Benefits

The tax and other benefits of the Post Office Monthly Income Scheme (POMIS) are:

• Tax benefits: The interest earned on POMIS deposits is taxable, but the deposit is eligible for tax benefits under Section 80C of the Income Tax Act, 1961, up to a maximum limit of Rs. 1.5 lakhs per financial year.
• Safe and secure: POMIS is considered to be a safe and secure investment option, backed by the government of India.
• Convenient: The POMIS is available through any post office in India, making it a convenient investment option.
• Joint accounts: Joint accounts are allowed under the POMIS, making it a suitable option for families.
• Nomination facility: The POMIS also provides a nomination facility, allowing depositors to nominate a person to receive the deposit in case of their death.

Post Office Monthly Income Scheme: Premature Withdrawal Options

The options for premature withdrawal of the Post Office Monthly Income Scheme (POMIS) deposit are:

• Before completion of one year: If the deposit is prematurely withdrawn before the completion of one year, no interest will be paid, and only the principal amount will be refunded.
• After completion of one year: If the deposit is prematurely withdrawn after completion of one year, the interest payable will be reduced by 2% from the rate applicable for the period the deposit has remained with the post office.

How to Invest in POMIS or Open Account

A. Steps to open a POMIS account

The steps to open a Post Office Monthly Income Scheme (POMIS) account are:

1. Visit a nearby post office: Locate the nearest post office and visit it in person to open a POMIS account.
2. Fill out the application form: Obtain the POMIS application form from the post office and fill out the required details, including personal information, deposit amount, and nominee details.
3. Submit necessary documents: Submit the completed application form along with a self-attested photocopy of a government-issued ID (such as a PAN card, voter ID, etc.) and a recent passport-sized photograph.
4. Make the deposit: Pay the deposit amount in cash or by a crossed cheque in favour of the Postmaster.
5. Receive the account details: The post office will provide you with the account number and other details once the deposit has been processed.

B. Required documents for POMIS

The required documents for opening a Post Office Monthly Income Scheme (POMIS) account are:

1. Application form: The POMIS application form is available at the post office and needs to be filled out with the required personal and deposit information.
2. Proof of identity: A self-attested photocopy of a government-issued photo ID such as a PAN card, voter ID, passport, etc.
3. Proof of address: A self-attested photocopy of a recent utility bill (such as an electricity, water, or telephone bill), or a bank passbook that shows the current address.
4. Passport-sized photograph: A recent passport-sized photograph of the depositor.

It is important to note that the requirements and documents may vary from the post office to post office and may change from time to time. Interested individuals should check with their nearest post office or visit the India Post website for the latest information.

Post Office Monthly Income Scheme: Calculator

A Post Office Monthly Income Scheme (POMIS) calculator is a tool that calculates the estimated interest income from a POMIS deposit based on the deposit amount, interest rate, and deposit tenure.

The interest rate for POMIS is subject to change from time to time and is announced by the government of India. The calculator takes into account the current interest rate and calculates the estimated monthly interest income and the maturity amount.

It is important to note that the interest rate and the calculation of interest income are based on estimates and may differ from the actual interest earned. The interest rate and other details of the POMIS can be obtained from the nearest post office or the India Post website or through any of the post office monthly income scheme calculator.

Post Office Monthly Income Scheme: Rules and Regulations

The rules and regulations for the Post Office Monthly Income Scheme (POMIS) are as follows:

• Eligibility: The POMIS is available to Indian citizens, including joint accounts with a maximum of three adult holders.
• Minimum and maximum deposit: The minimum deposit amount is Rs. 1500 and there is no maximum limit.
• Deposit tenure: The deposit tenure is 5 years and cannot be extended.
• Interest rate: The interest rate for POMIS is announced by the government of India from time to time and is subject to change.
• Interest payment: Interest is paid out monthly and credited directly to the depositor’s account with the post office.
• Premature withdrawal: Premature withdrawal is allowed after the completion of one year, but with a 2% reduction in the applicable interest rate.
• Loan facility: A loan facility is available against the deposit, up to a maximum of 50% of the deposit amount.
• Nomination facility: The POMIS provides a nomination facility, allowing depositors to nominate a person to receive the deposit in case of their death.

Post office MIS Vs Bank FD Vs NSC

Post Office Monthly Income Scheme (POMIS), Bank Fixed Deposit (FD), and National Savings Certificate (NSC) are three investment options available to individuals in India.

The key differences between the three options are:

• Interest rate: The interest rate offered by POMIS and NSC is generally higher than that of a bank FD, but is subject to change from time to time as per government announcements. Bank FDs offer a fixed rate of interest for the entire tenure.
• Deposit tenure: The deposit tenure for POMIS is 5 years and cannot be extended. Bank FDs offer a range of tenures, ranging from 7 days to 10 years. NSC has a deposit tenure of 5 years, and it can be extended for a further 5 years.
• Liquidity: Bank FDs offer higher liquidity compared to POMIS and NSC. Premature withdrawal is allowed in bank FDs, but with a penalty. POMIS allows premature withdrawal after the completion of one year, but with a reduction in the applicable interest rate. NSC does not allow premature withdrawal.
• Tax benefits: NSC is eligible for tax benefits under Section 80C of the Income Tax Act, while POMIS and bank FDs do not provide any tax benefits.
• Loan facility: POMIS provides a loan facility, up to a maximum of 50% of the deposit amount. Bank FDs do not provide a loan facility. NSC can be used as collateral for loans.

FAQs About Post Office Monthly Income Scheme

Q1. Maximum Investment Amount in Post Office MIS

There is no maximum investment limit for the Post Office Monthly Income Scheme (POMIS). An individual can invest any amount starting from a minimum of Rs. 1,500. The investment can be made in multiples of Rs. 1,500.

Q2. How Does it Work- POMIS Calculation

The interest calculation for the Post Office Monthly Income Scheme (POMIS) is based on the deposit amount, interest rate, and deposit tenure. The interest rate for POMIS is announced by the government of India from time to time and is subject to change.

The interest income from a POMIS deposit is calculated as follows:

Interest income = (Deposit amount * Interest rate * Deposit tenure) / 12

For example, if an individual invests Rs. 50,000 for 5 years at an interest rate of 6%, the interest income would be:

Interest income = (50,000 * 6 * 5) / 12 = Rs. 15,000

This means that the depositor would receive a monthly interest income of Rs. 1,250.

It is important to note that the interest rate and the calculation of interest income are based on estimates and may differ from the actual interest earned. The interest rate and other details of the POMIS can be obtained from the nearest post office or the India Post website.

Q3. Is there any tax benefit for investing in POMIS?

No, there is no tax benefit for investing in the Post Office Monthly Income Scheme (POMIS). The interest income earned from POMIS is taxable under the provisions of the Income Tax Act. The interest income is added to the depositor’s taxable income and taxed at their applicable slab rate. TDS is also applicable on the interest income if it exceeds Rs. 10,000 in a financial year.

Q4. Can I withdraw my investment before maturity?

Yes, you can withdraw your investment before maturity in the Post Office Monthly Income Scheme (POMIS). However, there are some conditions and penalties applicable for premature withdrawal. If the deposit is withdrawn before 2 years, a penalty of 1.5% of the deposit amount is applicable. If the deposit is withdrawn after 2 years but before 5 years, a penalty of 1% of the deposit amount is applicable. No penalty is applicable if the deposit is withdrawn after 5 years.

It is important to note that premature withdrawal may impact the overall returns from the POMIS investment as the interest rate and return on investment are based on the deposit tenure. It is advisable to consult a financial advisor or the post office for more details on premature withdrawal before making a decision.

Q5. Is there any loan facility against POMIS?

Yes, a loan facility is available against the Post Office Monthly Income Scheme (POMIS) deposit. A depositor can avail of a loan of up to 50% of the deposit amount in case of an emergency. The loan can be availed from the post office where the deposit was made. The loan interest rate is 1% above the POMIS interest rate and is subject to change. The loan has to be repaid within 36 months.

It is important to note that availing a loan against a POMIS deposit may impact the overall returns from the investment as the interest income would be reduced. It is advisable to consult a financial advisor or the post office for more details on the loan facility and its impact on the POMIS investment.

Conclusion

-Post office’s monthly investment scheme is an effective investment scheme for people willing to invest and lock in money for the long term. It gives a high-interest rate and is one of the most opted for.