Post Office Monthly Income Scheme - Interest Rate & Benefits (2024)

1. Capital protection
   Backed by the government, ensuring the safety of your investment until maturity.
2. Low-risk investment
   You earn a fixed rate of interest as it does not depend on the market forces, making it a secure option for investors.
3. Payout timing
   Receive payouts after one month from the initial investment, not at the beginning of every month.
4. Nomination facility
   Nominate a family member as a beneficiary for ease of claims in case of the investor's demise.
5. Transaction ease
   Collect monthly interest directly from the post office or you can opt for automatic transfer to your savings account.
6. Reinvestment option
   Post maturity, you can also reinvest the corpus for another five years.

Post Office Monthly Income Scheme details

The following table outlines the maximum investment limits applicable to the Post Office Monthly Income Scheme (POMIS):

If you want to earn monthly interest on your investment, you can also consider Fixed Depositas an option. Financial institution like Bajaj Finance, offers interest rate of up to 8.65% p.a. on FDs, and flexible payout options like monthly, quarterly, half yearly, annually. You can choose any of payout option according to financial needs, and easily invest online through the Bajaj Finserv app or website.

Benefits of Post Office Monthly Income Scheme (MIS)

The post office monthly income scheme offers several benefits:

1. Guaranteed Monthly Income

POMIS provides a fixed and guaranteed monthly income to investors. This regular payout serves as a stable source of cash flow, making it an attractive option for individuals looking to supplement their monthly income or retirees seeking financial stability.

2. Low Risk

POMIS is a low-risk investment option as it is backed by the Government of India. The principal amount invested and the interest earned are considered safe, providing investors with a sense of security.

3. Accessibility and convenience

POMIS is easily accessible through post offices across India, making it a convenient option for a wide range of investors. The simplicity of the process and the widespread availability of post offices contribute to its popularity.

4. No Market-linked risks

Unlike some other investment options, POMIS does not expose investors to market-linked risks. The returns are not dependent on market conditions, making it suitable for those who prefer a more predictable investment.

Who should invest in POMIS?

Investing in the post office monthly income scheme is suitable for:

1. POMIS is a low-risk investment as this scheme is backed by government, making it suitable for conservative investors who prioritise capital preservation and are not comfortable with higher-risk options.
2. POMIS can be attractive for retirees and senior citizens who are looking for a steady monthly income stream to supplement their pension or other income sources.
3. Individuals who prioritise regular income over high returns may find POMIS appealing. It provides a fixed monthly payout, offering financial stability.

Post Office Monthly Income Scheme interest rates 2024

The Post Office Monthly Income Scheme (POMIS) offers a competitive interest rate of 7.4% per annum, compounded monthly for 2024. See the table below for historical POMIS interest rates.

Documentation required to open Post Office Monthly Income Scheme

• Submit a government-issued ID or recent utility bills as proof of your address.
• Provide a copy of a government-issued ID, like Passport, Voter ID card, Driving License, Aadhaar, etc.
• A passport-size photo

How to Open a POMIS Account?

To open a POMIS account you must have a Post Office savings account. If you don’t have a Post Office saving account, visit your nearest Post Office an open an account. Then, proceed with the following steps to open a POMIS Account:

1. Get a POMIS account opening form from the nearby post office.
2. Complete the form and submit the required documents along with signature of any witness or nominee (take original documents for verification)
3. Initial amount can be deposited through a cheque, the cheque date considered as the account opening date.

Also read: What is Post Office Tax Saving Scheme

Eligibility criteria for opening Post Office Monthly Income Scheme account:

• Indian citizenship.
• A guardian is permitted to open an account on behalf of a minor or a person of unsound mind.
• Minors aged 10 years and above have the eligibility to open an account in their own name.

Early withdrawal penaltyPOMIS

In the POMIS, if you choose to withdraw your investment before the completion of the maturity period, which is typically five years, a penalty is applied. The penalty structure is as follows:

• No withdrawals allowed within the first year from the date of deposit.
• If closed after 1 year but before 3 years, a deduction equal to 2% from the principal will be applied, and the remaining amount will be paid to the account holder.
• If closed after 3 years but before 5 years, a deduction equal to 1% from the principal will be applied, and the remaining amount will be paid to the account holder.
• The account can be prematurely closed by submitting the prescribed application form along with the passbook at the concerned post office.

Also read: What is Small Saving Scheme

POMIS premature withdrawal rules

• No withdrawal is allowed within the first year from the date of deposit.
• If the account is closed after 1 year but before 3 years from the date of opening, a deduction of 2% from the principal will be applied, and the remaining amount will be paid.
• If the account is closed after 3 years but before 5 years from the date of opening, a deduction of 1% from the principal will be applied, and the remaining amount will be paid.
• To close the account before maturity, submit the prescribed application form along with the passbook at the concerned Post Office.

Conclusion

Post Office Monthly Income Scheme stands as a viable investment option for those seeking a regular and stable income. With straightforward procedures for opening an account at any post office in India, POMIS offers fixed returns. While it may not be suitable for everyone, POMIS serves as a reliable choice for conservative investors looking for a steady monthly income.

Calculate your expected investment returns with the help of our investment calculators

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