What is the Post Office Monthly Income Scheme (POMIS)?
The Post Office MIS is a low-risk investment option where you deposit a lump sum and receive fixed monthly interest payments for 5 years. It’s perfect for anyone who wants a predictable income stream without worrying about market fluctuations. Whether you’re saving for regular expenses or just want a safe place to park your money, POMIS is worth considering.
Here’s the deal: you can start with as little as ₹1,000, making it accessible for almost everyone. The maximum investment limit is ₹9 lakh for a single account and ₹15 lakh for a joint account (with up to 3 account holders). The scheme matures in 5 years, and the principal amount is returned to you at the end, along with the interest earned monthly.
As of July 2025, the interest rate for POMIS is 7.4% per annum , paid monthly. This rate is set by the Government of India and reviewed quarterly, ensuring it stays competitive with other fixed-income options.
How Much Interest Will You Earn on ₹2 Lakh?
Let’s get to the math. If you invest ₹2 lakh in the Post Office MIS, how much will you earn monthly? The formula is simple:
Monthly Interest = (Investment Amount × Annual Interest Rate) ÷ 12
Plugging in the numbers:
- Investment Amount: ₹2,00,000
- Annual Interest Rate: 7.4%
- Monthly Interest = (2,00,000 × 7.4%) ÷ 12 = ₹1,233.33
So, by investing ₹2 lakh , you’ll earn ₹1,233 per month for 5 years. Over the full tenure (60 months), that adds up to ₹73,980 in total interest (₹1,233 × 60). At maturity, you’ll also get your original ₹2 lakh back, making this a secure way to generate passive income without touching your principal.
Sounds good, right? But there’s more to know before you jump in.
Key Features of Post Office MIS
Here are some highlights of the POMIS that make it stand out:
- Low Entry Point : Start with just ₹1,000, and invest in multiples of ₹1,000.
- Investment Limits : Up to ₹9 lakh for a single account and ₹15 lakh for a joint account (shared equally among up to 3 holders).
- 5-Year Tenure : The scheme locks in your money for 5 years, with the option to reinvest at maturity.
- Guaranteed Returns : The 7.4% annual interest rate ensures fixed monthly payouts, backed by the Government of India.
- Flexible Account Types : Open a single account, a joint account, or even an account for a minor (above 10 years, managed by a guardian).
- Premature Withdrawal : You can withdraw after 1 year, but penalties apply (2% deduction if withdrawn between 1-3 years, 1% if withdrawn between 3-5 years).
- Taxation : Interest earned is taxable as per your income tax slab, but there’s no TDS (Tax Deducted at Source). You’ll need to declare the interest while filing your ITR. Investments don’t qualify for Section 80C deductions.
How to Open a POMIS Account
To invest in POMIS, you’ll need a Post Office Savings Account first. Don’t have one? No worries—it’s easy to open at your nearest post office. Once that’s sorted, follow these steps:
- Visit your local post office and ask for the POMIS application form (or download it from the India Post website).
- Submit the form with:
- A photocopy of ID proof (e.g., Aadhaar, PAN, or voter ID).
- A photocopy of address proof.
- Two passport-sized photographs.
- Deposit your investment amount (e.g., ₹2 lakh) via cash or a dated cheque. The account opening date will be the cheque’s date.
- Nominate a beneficiary (optional but recommended) for seamless fund transfer in case of unforeseen events.
Once your account is active, interest payments start one month from the opening date and continue monthly until maturity. You can collect the interest in cash, have it credited to your savings account, or even reinvest it in another scheme like a Recurring Deposit for extra returns.
Is POMIS Right for You?
The Post Office MIS is a solid choice if you’re looking for:
- A safe, government-backed investment with no market risks.
- Regular monthly income to cover expenses or supplement your pension.
- Low entry barriers , making it accessible for small and large investors alike.
However, it’s not perfect for everyone. The returns (7.4%) may not beat inflation in the long run, and the interest is taxable, which could reduce your net income. If you’re in a higher tax bracket or want higher returns, you might want to explore other options like fixed deposits from companies like Bajaj Finance (offering up to 7.3% p.a.) or mutual funds (though they carry more risk).
Tip: Use a POMIS Calculator
Not sure how much you’ll earn with a different investment amount? Use an online POMIS calculator to get instant results. Just enter your investment amount, the current interest rate (7.4%), and the 5-year tenure, and it’ll show your monthly interest and total returns. This helps you plan your finances without manual calculations or errors.
Disclaimer
The information provided is for general purposes only. Interest rates and scheme details are subject to change. Always verify the latest details on the India Post website and consult a financial expert before investing.
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