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Post Office Monthly Income Scheme - Interest Rate 2024, Benefits & How to Open POMIS Account?

By Mohammed S Chokhawala

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Updated on: Jul 12th, 2024

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6 min read

Latest Update:

Budget 2023-24: The maximum deposit limit for the monthly savings scheme is enhanced from Rs.4.5 lakh to Rs.9 lakh for a single account and from Rs.9 lakh to Rs.15 lakh for a joint account.

Similar to any nationalised bank, the Post Office has been a trusted place for depositing and transacting with money. This is trusted by the elderly generation. A number of saving schemes are offered by branches of the Post Office across the country. 

Post Office Monthly Income Scheme (POMIS) is one such scheme where you invest a certain amount and earn a fixed interest every month. As the name suggests, you can invest in this from any post office. In this article, we will cover the following aspects of POMIS. 

Post Office Monthly Income Scheme

Post Office offers POMIS among a host of banking products and services, under the purview of the Finance Ministry. Hence, it is highly reliable. It is a low-risk monthly interest scheme(MIS) and generates a steady income. 

You can invest up to Rs. 9 lakh individually or Rs.15 lakh jointly, and the investment period is 5 years. Capital protection is its primary objective. The interest rate for April-June 2024 is 7.40% per annum, payable monthly.  

For instance, Mr Sharma has invested Rs.9 lakh in the post office monthly investment scheme for 5 years. As mentioned above, the interest rate is 7.40% p.a. His monthly interest will be Rs.5,550 for that period. Post-maturity, he can withdraw his deposit, Rs.9 lakh, along with the accumulated interest either from any post office or get it transferred to his savings account via Electronic Clearance Service (ECS). Alternatively, the account can be renewed.

Features & Benefits of Post Office Monthly Income Scheme

  • Capital protection: Your money is safe until maturity as this is a government-backed scheme. 
  • Tenure: The lock-in period for Post Office MIS is 5 years. You can withdraw the invested amount when the scheme matures or reinvest it. 
  • Low-risk investment: As a fixed-income scheme, the money you invest is not subject to market risks and is quite safe. 
  • Affordable deposit amount: You can start with a nominal initial investment of Rs.1,000. As per your affordability, you can invest in multiples of this amount. Keep note that the maximum limit on POMIS is Rs 9 lakhs and for jointly Rs 15 lakhs. 
  • Guaranteed returns: You earn income in the form of interest every month. The returns are not inflation-beating but are higher compared to other fixed-income investments like FD. 
  • Tax-efficiency: Your investment is not covered under Section 80C; TDS is not applicable either. 
  • Payout: You will receive the payout one month after making the first investment, not at the beginning of every month. 
  • Multiple Account Ownership: You can open more than one account in your name. But the total deposit amount cannot exceed Rs. 9 lakhs in all of them together. 
  • Joint account: You can open a joint account with 2 or 3 people. In this case, an aggregate sum of up to Rs.15 lakhs can be invested in this account.
  • Fund movement: The investor can move the funds to a recurring deposit (RD) account, which is a feature the Post Office has added recently. It is initiated to earn more interest and returns.
  • Nominee: The investor can nominate a beneficiary (a family member) so that they can claim the benefits and corpus if the investor passes away during the account’s term. 
  • Ease of money/interest transaction: You may collect the monthly interest directly from the post office or get it transferred automatically to your savings account. Reinvesting the interest in a SIP is also a lucrative option. 
  • Reinvestment: You may reinvest the corpus post maturity in the same scheme for another block of 5 years to continue earning benefits.

Eligibility Criteria to Open a POMIS Account

  • Only a resident Indian can open a POMIS account. 
  • NRIs cannot enjoy the benefits of this scheme. 
  • Any adult can open an POMIS account. 
  • You can open an account on the behalf of a minor who is aged 10 years and above. They can avail the fund when they become 18 years old. 
  • A minor, after attaining majority, has to apply for conversion of the account in his name.

Account Type

Maximum Deposit Amount Allowed

Single Account

Rs. 9 lakhs

Joint Account (2 or 3 adults)

Rs. 15 lakhs

Who Should Invest in POMIS?

POMIS has the flexibility and reliability that appeal to risk-averse investors, albeit with limited tax benefits. If you think, you belong to that category, now is the time to consider starting one. 

How to Open a POMIS Account

Opening a POMIS account is not as tedious as you think. Instead of imagining long queues and even longer paperwork, please take a look at the step-by-step procedure. 

  • Open a post office savings account, if you haven’t already.
  • Collect a POMIS application form from your Post Office.
  • Submit the duly filled form along with a photocopy of your ID and residential proofs and 2 passport-size photos at the Post Office. Do carry the originals for verification.
  • Get the signatures of your witness or nominee(s) on the form.
  • Make the initial deposit via cash or cheque. In the case of a post-dated cheque, the date on the cheque will be the account opening date.
  • Once the processing is done, the executive at Post Office will provide you with the details of your newly opened account.

Consequences of Early Withdrawal

Time of POMIS withdrawal

Outcomes of premature withdrawal

Before completing one year

Zero benefits

Between 1st and 3rd year

The entire deposit refunded after deducting a 2% penalty

Between 3rd and 5th year

Entire corpus refunded with 1% penalty

Comparing Post Office MIS with other Monthly Income Plans

POMIS

Monthly Income Mutual Fund

Monthly Income Insurance

Assured income at an annual rate of 7.40%

Invested in 20:80 equity-debt ratio and hence no guaranteed income

Monthly annuities (rates vary based on premiums & period)

No TDS

TDS applied

Annuity is taxed

Fixed return rate

Floating rate as per the market movement

NA

Low-risk, suitable for the risk-averse

Suitable for people with a high-risk appetite

Double benefits of investment & insurance

Withdrawal permitted after 12 months with a penalty

Exit load applicable if withdrawn before time

Higher surrender charges as this is a long-term investment

Limit of Rs. 9 lakhs per account and Rs. 15 lakhs for a shared account

No investment limit

No investment limit

POMIS Interest Rate 2024

The Post Office Monthly Income Scheme (POMIS) provides interest at the rate of 7.4% per annum which is paid monthly for 2024. Below given is the table for past data on the interest rates for POMIS.

Time Interval

POMIS Interest Rate (Per Annum)

1st April 2024 - 30th December 2024

7.40%

1st January 2024 - 31st March 2024

7.40%

1st October 2023 - 31st December 2023

7.40%

1st April 2023 - 30th June 2023

7.40%

1st January 2023 - 31st March 2023

7.10%

1st October 2022 - 31st December 2022

7.10%

1st April 2020 – 30th September 2020

6.60%

1st January 2020 – 31st March 2020

7.60%

1st October 2019 – 31st December 2019

7.60%

1st July 2019 – 30th September 2019

7.60%

1st January 2019 – 31st March 2019

7.70%

1st October 2018 – 31st December 2018

7.70%

1st January 2018 – 30th September 2018

7.30%

Post Office Income Scheme for Senior Citizens

For the individuals above the age of 60 years old, i.e, senior citizens can take advantage of the post office savings scheme and less worry at retirement. Post Office provides Senior Citizens Savings Scheme (SCSS) provides stable  retirement benefit while availing tax benefits under section 80C, the interest paid on SCSS is at 8.2% per annum and the minimum deposit is Rs 1,000. To understand more you can also refer our article on SCSS.

Related Articles

  1. Post Office Savings Schemes 2024
  2. Post Office PPF Calculator
  3. Kisan Vikas Patra
  4. NSC (National Savings Certificate)
  5. Public Provident Fund(PPF)
  6. Mahila Samman Saving Certificate
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Frequently Asked Questions

How is the individual account holder’s share calculated in the case of a joint account?

Each joint account holder will have an equal share in each joint account.

What if I don’t want to withdraw the deposit amount upon the account maturity?

In case you don’t withdraw the deposit amount upon maturity, the money will stay in the account and earn a simple interest as per the Post Office Savings Account for a period of two years from the account maturity. 

Is this scheme suitable for senior citizens?

Yes. This is a favourable scheme for senior citizens as they can deposit their life savings in the account and earn interest for their monthly expenses.

What happens to my account if I have to move from one city to another due to work?

In the event of shifting from one city to another, you can easily transfer your POMIS account to the Post Office in the current city at no extra cost. 

What is the POMIS investment limit in 2023?

The maximum deposit limit under POMIS is 9 lakhs for an individual account and 15 lakhs for a joint account. 

Can the nominee withdraw the amount in the case of the death of the investor before maturity?

Yes, nominees can apply for death claim settlement immediately upon the death of the POMIS investor, even if the lock-in period of 5 years is not complete. They can apply for the death claim and get a refund of the investment amount and interest accumulated till death. 

Is there a provision to get the interest credit of the MIS account to the RD account?

No. There is no such provision in the MIS. Instead, Standing Instructions can be given in a prescribed application form to credit the RD account from the SB account.

What is the minimum amount to be deposited to open an MIS account?

MIS account can be opened with a minimum of Rs.1,000.

What will be the consequence of premature closure of the account?

No deposit shall be withdrawn within one year from the date of initial deposit.

If the account is closed after 1 year but within 3 years, up to 2% of the principal amount will be deducted, and the balance will be refunded.

If the account is closed after 3 years but before 5 years, up to 1% of the principal amount will be deducted, and the balance will be refunded.

Who can open a Monthly Income Scheme Account?

The foloowing persons are eligible to open a monthly income scheme account:

  • A single Adult.
  • A Joint Account (up to 3 adults) (Joint A or Joint B)
  • A guardian on behalf of a minor/ unsound person.
  • a minor above 10 years in his own name.
Does the Post office provide the facility of Net banking / mobile Banking?

Yes. Intra-operable net banking/ Mobile banking is available for Post Office Savings customers of Core Banking Solutions post offices.

Is deduction on interest from Post Office Savings Account allowed under the Income Tax Act?

Section 80TTA allows deduction for interest on Post Office Savings Account upto a maximum of Rs.10,000.

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About the Author

I'm a chartered accountant, well-versed in the ins and outs of income tax, GST, and keeping the books balanced. Numbers are my thing, I can sift through financial statements and tax codes with the best of them. But there's another side to me – a side that thrives on words, not figures. Read more

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Quick Summary

The Post Office Monthly Income Scheme (POMIS) has increased the maximum deposit limit and offers fixed interest rates. It's a low-risk investment backed by the government, with a tenure of 5 years. Residents can open accounts individually or jointly. POMIS provides guaranteed returns, tax-efficient benefits, and reinvestment options. Investors can open accounts easily at post offices. Early withdrawals incur penalties. Comparisons with other income plans are highlighted, as well as past interest rates data.

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