Updated on 21 Jan 2020.
POMIS or Post Office Monthly Income Scheme is an investment plan where you can invest a lump sum amount and can get monthly interest as income.
You can invest in POMIS at any Post Office across India.
This scheme is specially designed for people who want to invest the lump sum amount to get a regular monthly income. If you are not among them and want to invest in the long term you can read – Best Long Term Investment Options in India.
Features & Benefits of Post Office Monthly Income Scheme
You can start investing in POMIS in multiples of Rs 1,000 maximum of Rs. 4.5 lakh in an Individual Account and Rs. 9 lakh in Joint Account.
Each account holder in a joint account should have an equal share.
Let’s discuss the features & benefits of POMIS-
- Protection – Your capital is completely safe and protected as POMIS is a government-backed scheme.
- Lock-in – POMIS has a lock-in period of 5 years. You can reinvest or withdraw when matures.
- POMIS can be prematurely encashed after 1 year before 3 years at a discount rate of 2% and after 3 years at a discount rate of 1%.
- Low-risk investment – POMIS is completely free from market risk and your investment is safe.
- Guaranteed Income – The interest is paid back to your savings account every month. Thus, you get a monthly income from the interest earned.
- The payout comes at the end of every month and not at the beginning of the month.
- Reinvesting the interest – You can directly reinvest the interest in SIP or RD in the Post Office to generate more wealth for you.
- Minor Account – You can open POMIS in the name of your child who is above 10 years of age. Maximum of Rs 3 lakhs in the name of the minor. After attaining 18 years of age has to apply for conversion from minor to major.
- Tax Benefits– Even though the scheme does not come under Section 80C. Income is subject to taxation but it has no TDS.
- Nominee Facility– POMIS has a nomination facility so in case if the investor passes away, the nominee gets the corpus.
- POMIS account can be transferred from one post office to another post office.
- A maximum of 3 adults can open the joint account.
How to Open Post Office MIS account
The eligibility criteria to open POMIS is below.
- The person is a resident of India. No NRI can enjoy this scheme.
- The person should attain 10 years of age.
- Before 18 years of the age maximum capital to invest is Rs 3 lakhs.
Steps to open POMIS account
- Visit any nearby Post Office and open a savings account, if you haven’t already.
- Take the POMIS form. You can download it from here also.
- Submit the duly filled form and submit it along with the photocopies of identity card, residential proof, and 3 passport-sized photographs. For a joint account, each individual’s identity proof, residential proof, and photographs are required.
- Do the signatures at the required places. Do fill the nominee column.
- Make the deposit via cash or cheque. If given Post Dated Cheque account opening date will be considered as that date.
Post Office Monthly Income Scheme Calculator
Calculating the interest payout of POMIS is very simple and can be calculated with the below formula. Taking ROI as 7.6% (revised on 01.07.2019)
So with the above formula, if deposited Rs 4.5 lakhs in an individual account, monthly interest payout is Rs 2,850.
Also, we are providing one calculator link here. Click here for POMIS Calculator.
Post Office Monthly Income Scheme Interest Rate
POMIS interest rate is 7.6% per annum payable monthly.
For example, if a person deposit Rs 1,00,000 then at an interest rate of 7.6% per annum he will receive Rs 633 per month.
If interest rate changes it will not affect your monthly income because you will get the interest rate applicable on the of account opening.
Post Office Monthly Income Scheme for Senior Citizens
POMIS is a good investment option for senior citizens and retired people who got a lump sum amount on their retirement from their job.
They can deposit a maximum of Rs 9 lakhs along with their spouse in a joint account and they can enjoy a monthly income of Rs 5,700 (approx.) which is a secure option to get a regular monthly income to cater the monthly household needs.
There are many investment options available for senior citizens but this is one of the safest and suggested investment options for them.
TDS would not be deducted from the deposit and the payout but the interest earned is taxable income.