Post Office Monthly Income Scheme (POMIS) – All You Need to Know

Post Office Monthly Income Scheme (POMIS) is safe and secure investment avenue that guarantee you fixed monthly income. You can subscribe to this scheme at any post office in India. The lock in period for investment under this scheme is 5 year. Monthly Income Scheme (MIS) is a low risk investment scheme and generate a fixed income for you. Account can be opened in single name or jointly also. POMIS  is best for investors, looking for steady income and are reluctant to invest in equity instruments.

Here in this article, we will study about key features of Post Office Monthly Income Scheme (POMIS).

Eligibility for Post Office Monthly Income Scheme  (MIS) –

• Any Indian Resident Individual can open POMIS account.
• Account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account.
• Minor after attaining majority has to apply for conversion of the account in his name.
• NRIs are not eligible to open POMIS account.

Investment Limit under Post Office Monthly Income Scheme (POMIS) –

Type of Account	Minimum	Maximum
Single Account	₹ 1,500/-	₹ 4,50,000/-
Joint Account	₹ 1,500/-	₹ 9,00,000/-

*In case of minor, investment can not exceed ₹ 3,00,000/-

Investment Period – 

Investment / Maturity Period for investment made under Monthly Income Scheme is 5 years from 01/12/2011. However, it can be prematurely en-cashed as per following terms:

• If withdrawal before 1 year – No Benefit
• If withdrawal between 1^st and 3^rd year – 2 percent penalty/discount on deposit
• If withdrawal between 3^rd and 5^th year – 1 percent penalty/discount on deposit

Interest Rates on Monthly Income Scheme –

Investment made under Post Office Monthly Income scheme earn interest rate 7.60 (from 01/07/2019) percent per annum, payable monthly.

For example, if Mr. Deepak has invested ₹ 4,50,000/- in POMIS for 5 Years. His monthly income will be ₹ 2,850/- for that period. After maturity, he can en-cash his 4.5 lakhs from the account.

How to open account under Post Office Monthly Income Scheme –

It is very easy to open post office monthly income scheme account with minimal documentation. Follow these steps :

• Download Post Office MIS Application Form here or Get it from post office.
• Fill the form
• Also get signature of witness on form in case of nomination.
• Submit the form along with Xerox copy of Photo ID , Residential Proof and 2 passport size photographs.
• Make the initial deposit via cash/cheque. In case of payment by cheque, date of realization of Cheque in the Government Account will be the date of opening of account.

Key Features and Benefits of Post Office Monthly Income Scheme –

• Risk Free – As the name suggest, this scheme is fixed monthly scheme. The fund invested under this scheme is free from market risk and you get guaranteed return.
• Safety – The scheme is Govt. of India backed scheme so money invested under this scheme is safe.
• Guaranteed Return – Post Office Monthly Income Scheme (POMIS) offer guaranteed monthly income at an annual interest rate 7.60 percent,payable monthly.
• No TDS – TDS is not applicable on investment under POMIS.
• Tax Rebate – Investment made in POMIS account is not eligible for tax rebates under section 80C of Income Tax Act, 1961.
• Nomination – Nomination facility is also available. Customer can choose the nominee while opening account or during the investment term.
• Minor – You can also invest on behalf of the minor whose age is 10 years and above. They can avail the fund when they become major. However, investment limit for minor is ₹ 3,00,000/-.
• Joint Account – Joint Account can also be opened by 2 or 3 adults. However, each account holder will have equal share, regardless of who is contributing. Single Account can also be converted into Joint Account.
• Multiple Account – Multiple accounts can be opened in any post office subject to maximum investment limit by adding balance in all accounts.
• Transfer of Account – Account can be transferred also from one post office to another.
• Reinvestment Option – Amount you get after maturity can also be reinvested in POMIS.
• Bonus – Currently, there is no bonus paid on maturity on the scheme. However, there was 5 percent bonus paid on investment made between 08/12/2007 to 30/11/2011.
• Payout – Interest Proceeds are auto credited in investor’s post office saving account on monthly basis by ECS/CBS. Investor can allow the interest proceeds to accumulate also but that fund do not earn any interest.
• Recurring Deposit – It is a new feature which allow you to associate the POMIS account with RD account. Interest proceeds are invested into recurring deposit on monthly basis.