Everything you need to know Post Office Monthly Income Scheme?


The Department of Posts, which is part of the Ministry of Communication, has been providing banking and remittance services to Indian citizens through the network of post offices set up across the country. The post office saving schemes are one of the most sought-after services among the banking and remittance services offered by these post offices.

One such popular savings scheme offered by the Department of Post is the Post Office Monthly Income Scheme Account (MIS). Under the Post Office Monthly Income Scheme, a person can earn a fixed income every month by investing a certain amount under the said scheme.

In this article, we shall be discussing following details about Post Office MIS-

Introduction

As stated above, the “Post Office Monthly Income Scheme” is one of the hosts of banking and remittance products offered by the Department of Post. Since all these saving schemes are backed by the government of India, the risk profile of these schemes is very low and is totally suitable for senior citizens or investors with low risk appetite who are looking to earn a steady income on a monthly basis without taking any risk.

Features of the Scheme

Who can invest in the scheme:

Any resident adult can open the post office MIS account individually or jointly with another resident adult. An adult can also open an account in the capacity of guardian of a minor who has reached the age of 10 years or more.

No NRIs can invest in the scheme.

Minimum Investment: Account can be opened with minimum investment of Rs.1000 only.

Maximum Investment: A maximum investment of Rs.4.50 lacs can be made in single account and Rs.9.00 lacs in a joint account, under the scheme.

If a resident adult is investing in a scheme as a guardian of a minor, then limit of Rs. 4.50 lacs shall be considered separately.

Tenure: The lock-in period for the scheme is 5 years. The invested amount can be withdrawn or re-invested at the end of 5 years.

Interest Rate: For the quarter ending 31 March 2022, the interest rate is 6.6% per annum, payable monthly.

Tax Benefits: The scheme is not covered under Section 80C or any other section of chapter VI of the Income tax act. Interest income shall be taxable in the hand of depositor.

Multiple account ownership: A person can open more than one account in his/her name. But the total deposit amount under the scheme cannot exceed Rs.4.5 lacs in all of them together.

Pre-mature closure of account:

Time for pre-closure of POMIS Result of Premature Withdrawal
Within one year of investing in Scheme Not allowed
Between 1 to 3 years from the date of investing Entire principal amount shall be refunded after deducting 2% penalty from the principal.
Between 3 to 5 years from the date of investing Entire principal amount shall be refunded after deducting 1% penalty from the principal.

Death of Depositor: In case the depositor dies before the maturity, the account may be closed and amount will be refunded to nominee/legal heirs.

Whether you should invest in the scheme?

Just like any other financial product in the market, there are both pros and cons associated with the scheme. If you are looking for a scheme that offers an attractive rate of return with minimal risk, then you can invest in the scheme. However, if you are also looking for an investment option that offers tax benefits, the scheme is not for you.