Post Office Monthly Income Scheme
In answer to the question, "What is Post Office Monthly Income Scheme?", the Post Office Monthly Income Scheme (POMIS), as the name suggests, is an income scheme that delivers a monthly income when people deposit a lump sum amount in the scheme.
Details of Post Office Monthly Income Scheme
The Post Office Monthly Income Scheme is one of the highest interest paying schemes on the market that also provides safety because it is backed by the Union Finance Ministry. As is usual with any scheme, the scheme comes with terms and conditions that apply. However, this scheme is aimed at the small investor because it sets a maximum limit that can be invested under the scheme, which is currently Rs. 9 lakh for an individual account and Rs. 15 lakh for a joint account. The current interest rate is 7.40% per annum, payable monthly.
Features of POMIS
The POMIS scheme is a wide-reaching one that allows almost anyone to open an account and derive benefits of the scheme, including the following features:
People Who Can Open a POMIS Account
The people who can open a POMIS account are as follows:
- An adult individual
- A guardian on behalf of a minor
- A guardian on behalf of a person with an unsound mind
- Minors aged ten years and above in their name
Type of POMIS Account that can be Opened
The types of POMIS accounts that can be opened are:
- Individual or Single account in the name of one person
- Joint Account in the names of two or three individuals
Type of Deposit that can be made to the POMIS Account
The types of deposits that can be made to the POMIS account are:
- An individual or joint account can be opened with a minimum of Rs. 1,000 deposit and further deposits of Rs. 1,000 or multiple
- An individual or single account can accept only up to a maximum limit of Rs. 9 lakh
- A joint account can accept only up to a maximum limit of Rs. 15 lakh
- A joint account will entail holders to enjoy equal share of the investment
- An individual can open multiple POMIS accounts but with the condition that the sum of all investments in different POMIS accounts shall not exceed Rs. 9 lakh in an individual account or Rs. 15 lakh in joint account. However, this limit shall not apply if the individual has opened accounts on behalf of a minor or a person of unsound mind
Payment of Interest
The payment of interest under the POMIS scheme is as per the following terms and conditions:
- Applicable interest is payable after the completion of a month from the date of opening and every month thereafter until maturity
- Interest accrued every month has to be claimed or deposited to a Post Office Savings Account via auto credit at the same post office or ECS to an account in other CBS post offices
- Unclaimed interest will not earn additional interest
- Since the interest earned is taxable, the depositor is responsible for payment of taxes, if any, on the interest earned for the financial year
Early Closure of POMIS Account
The POMIS comes with terms and conditions, and these apply for premature or early closure of the account before the maturity period of five years from the date of opening. These include:
- Premature or early closing is not permitted before the elapse of one year from the date of opening of the POMIS account
- If the POMIS account is closed anytime between one year and three years after the date of opening, the amount standing to the credit of the account holder will be paid after making a deduction equal to 2% of the principal
- Similarly, if the POMIS account is closed anytime between three years and five years after the date of opening, the amount standing to the credit of the account holder will be paid after making a deduction equal to 1% of the principal
- The premature closure of POMIS account can be done by submitting a prescribed form along with the related passbook to the post office where the POMIS account was opened

Payment at Maturity
The POMIS account has a maturity period of five years from the date of opening of the account. The account will be closed at the completion of five years after the account opening date, and the amount standing to the credit of the holder will be paid along with any interest accrued to the holder on the submission of the prescribed form at the post office where the account was opened.
In the unlikely event of the account holder's death prior to the account’s maturity date, the account may be closed, and the deposit refunded along with interest up to the month preceding the month in which refund is made to the nominee or legal heirs as per the provisions of the General Rules.
Benefits of POMIS
The benefits of a POMIS accounts are many, and they include the following:
- The account holder’s capital is protected because the scheme is backed by the Union government
- The POMIS account is among the safest of all interest-generating schemes, although the scheme does not qualify currently for deduction under Section 80C
- The POMIS scheme offers, at the current interest rate of 7.4% per annum, one of the highest interest rates among all schemes
- The scheme benefits those interested in small savings, and therefore, there is a limit to the maximum amount that can be deposited in a single account; Rs 9 lakh maximum deposit for a single account and Rs 15 lakh for a joint account. The minimum deposit is fixed at just Rs 1,000
- Since the scheme is not linked to the market, the interest is guaranteed as declared by the government from time to time. The current rate is 7.4%, payable monthly
- The scheme offers a source of steady income and protection of capital
- The scheme does not attract TDS
- Using a post office monthly income scheme calculator, it can be seen that if depositors invest Rs. 15 lakh in the POMIS scheme, then they would receive a monthly interest of Rs. 9,250 at the current interest rate of 7.4% per annum.
Eligibility criteria to open a POMIS account
The POMIS scheme is open to all Indian residents only, and therefore, non-resident Indians (NRI) cannot participate in the scheme. Those that can apply include the following:
- An adult resident Indian above 18 years of age
- A group of individual adult resident Indians comprising up to three individuals can open a joint account
- A guardian can open an account for a minor who is above 10 years and below 18 years of age
- Minors above the age of 10 years can open an account in their name
- A guardian can also open an account for an unsound person
Current Interest Rates on Post Office Monthly Income Scheme
The current interest rate applicable to the deposits under POMIS is 7.4% per annum, payable monthly with effect from 1 January 2024.
How to Open a POMIS Account
The simplest way to open a POMIS account is to visit the nearest post office and collect the forms for the savings account and the POMIS account and take guidance from the postmaster who should be able to help.
The process is simple and will need the support of necessary documents to prove the identity and the address.
The post office savings account would enable the account holder to give standing instructions for crediting interest from the POMIS account.
The holder can deposit the required amounts for both the savings account and the POMIS account.
Documents Required
The documents required to open a POMIS account are the following:
- Copy of government-issued ID like a passport, Voter ID card, driving license or Aadhaar card as identity proof
- Copy of government-issued ID like a passport, Voter ID card, driving license, recent utility bill or Aadhaar card as address proof
- Two passport-size photographs
FAQs
Can a Senior Citizen apply for POMIS?
Yes, this is an excellent scheme for senior citizens to park their retirement funds to the extent of Rs. 9 lakh in individual account or Rs. 15 lakhs in joint account and earn a regular income
What is the Minimum Balance that I Need to Maintain in a Post Office MIS scheme?
The minimum amount of deposit is just Rs. 1,000 in the POMIS scheme.
Who Should Invest in POMIS?
The Post Office Monthly Income Scheme is particularly well-suited for the following type of investors:
- Those who have just retired and have a sizeable chunk of retirement funds to invest. Because of the limitation of the maximum investment to Rs. 9 lakh in a single account or Rs. 15 lakh in a joint account, such investors can park this amount in the POMIS account and balance amounts in other asset categories
- Since this is a scheme backed by the government and very safe, investors who are averse to taking risks would be very keen to invest in the POMIS scheme
- This is an excellent scheme for those looking to get good, regular returns, which this scheme offers
- This is good for people who are just shy of the taxable limit because this scheme offers one of the highest interest rates, which is currently 7.4%, payable monthly
- This is a simple scheme, with a simple process available from the neighbourhood post office, backed by the government and earning high taxable interest, but no deduction of TDS.