post office monthly income scheme

post office monthly income scheme

The Post Office Monthly Income Scheme (POMIS) is a savings scheme offered by the Indian Postal Service. It is designed to provide a regular monthly income to investors who deposit a lump sum amount.

Here are some key features of the Post Office Monthly Income Scheme:

  1. Interest Rate: The interest rate for POMIS is set by the government and may vary from time to time. As of my last update, the interest rate was around 6.6% per annum, payable monthly. It's essential to check the current interest rate before investing.
  2. Investment Limit: The minimum investment amount for POMIS is ₹1,500, and the maximum investment limit for a single account is ₹4.5 lakh for an individual and ₹9 lakh for a joint account.
  3. Maturity Period: The maturity period for POMIS is 5 years. At the end of the 5-year term, the initial investment amount is returned to the investor.
  4. Monthly Income: Investors receive a fixed monthly income from their investment in POMIS. The interest earned is paid out monthly.
  5. Tax Implications: The interest earned from POMIS is taxable under the Income Tax Act. However, there is no tax deduction at source (TDS) on the interest earned.
  6. No Premature Withdrawal: While premature closure of the account is allowed after one year, there are penalties for doing so. If the account is closed between 1 and 3 years, a deduction of 2% of the deposit amount is made, and if closed after 3 years, a deduction of 1% is made.
  7. Availability: POMIS can be availed at any post office across India.

The Post Office Monthly Income Scheme is a relatively low-risk investment option suitable for individuals seeking regular monthly income. However, investors should consider their financial goals and the prevailing interest rates before investing.