Post Office Monthly Income Scheme (POMIS) Full Details
When it comes to safe and reliable investment options in India, the Post Office Monthly Income Scheme (POMIS) has always been a popular choice. Recognized and validated by the Ministry of Finance, this scheme is designed for individuals who prefer low-risk investments with a steady monthly income. It is particularly attractive for senior citizens, retired individuals, and risk-averse investors who want to ensure financial stability without exposure to market fluctuations.
What is POMIS?
The Post Office Monthly Income Scheme allows investors to deposit a lump sum amount in a post office and earn monthly interest payouts at a fixed rate. The current interest rate under this scheme is 6.6% per annum, disbursed monthly. This makes it an excellent option for people who want a regular source of income, especially during retirement or after leaving active employment.
The minimum investment is ₹1,500, while the maximum depends on the type of account (single, joint, or minor). The scheme comes with government backing, which means the principal and interest are completely safe.
Key Features of POMIS
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Maturity Period – The lock-in period is 5 years. After maturity, investors can withdraw the deposit or reinvest it.
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Number of Holders – The scheme allows single accounts or joint accounts with up to 3 holders.
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Nomination Facility – Investors can nominate a person to receive the benefits in case of their demise. Nomination can also be updated later.
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Transferability – The account can be transferred from one post office branch to another anywhere in India.
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Bonus Clause – Accounts opened before 1st December 2011 are eligible for a 5% bonus on maturity. Accounts opened after that date do not receive a bonus.
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Tax Treatment – Interest earned is fully taxable, but there is no TDS (Tax Deducted at Source) on the income.
Benefits of POMIS
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Capital Protection: Since the scheme is government-backed, the investment is completely safe.
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Low Risk: Unlike market-linked instruments, this scheme has zero risk of capital loss.
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Fixed Income: Ensures regular monthly payouts, making it a reliable income source.
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Affordable Investment: Entry is as low as ₹1,500, making it accessible to small investors.
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Multiple Ownership: Joint accounts allow families to invest together.
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Ease of Operation: Opening, operating, or transferring the account is simple and hassle-free.
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Ideal for Senior Citizens: Provides financial independence through guaranteed monthly income.
Current Interest Rates
As of now, the interest rates under POMIS vary depending on the tenure:
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1 year – 5.50%
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2 years – 5.50%
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3 years – 5.50%
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5 years – 7.6%
The 5-year option is the most popular because of its higher return and steady monthly income.
Investment Limits
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Single Account: Minimum ₹1,500, Maximum ₹4,50,000
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Joint Account: Minimum ₹1,500, Maximum ₹9,00,000
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Minor Account: Minimum ₹1,500, Maximum ₹3,00,000
👉 For example, if an investor puts ₹4,50,000 in a single account at 6.6% interest, they will earn around ₹2,475 per month as fixed income. Similarly, a joint account with ₹9,00,000 will generate nearly ₹4,950 per month.
Tax Implications
While POMIS offers safe returns, it does not provide any tax-saving benefits under Section 80C. The interest earned is considered taxable income as per the investor’s slab. However, since no TDS is deducted at the source, the investor needs to declare it while filing income tax returns.
Who Should Invest?
The scheme is best suited for:
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Senior Citizens who want guaranteed monthly income after retirement.
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Risk-Averse Investors who prefer safety over high returns.
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Families looking for an additional fixed income source.
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Guardians of Minors who want to build a secure future with safe investments.
Conclusion
The Post Office Monthly Income Scheme (POMIS) is a perfect blend of safety, stability, and regular income. While it may not offer very high returns like market-linked investments, it provides something equally valuable—peace of mind. Backed by the Government of India, this scheme ensures that your money is safe while generating a steady monthly income. For individuals who prioritize security over risks and want guaranteed payouts, POMIS is undoubtedly one of the best investment options available today.