Post Office Monthly Income Scheme 2024: Benefits, Eligibility, Interest Rate

September 18, 2024

Quick Summary

The Post office Monthly Income scheme provides investors with a fixed monthly income based on their investment.
The interest on the POMIS investment is calculated monthly and paid out to the investors at the end of each month.
The tenure of POMIS accounts is 5 years.

The Post Office Monthly Income Scheme 2024 (POMIS) is one of the best monthly income schemes started by the Indian Postal Service. All you need to do is invest a certain amount of money in any Post Office across the country and earn a fixed interest every month.

Why should you invest in the Post Office Monthly Income Scheme 2024? Investment in the POMIS is a low-risk investment with guaranteed returns and payouts. It provides you with tax efficiency and you can even choose a nominee for it.

In this article, we will closely follow the Post Office Monthly Income Scheme, POMIS interest rate, and many other details related to it. Read through till the end to know everything that you need to about this scheme.

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Understanding Post Office Monthly Income Scheme (POMIS)

The Post Office, like the nationalized banks of India, has also garnered high trust as a source for money transactions. This is even more true for the older generations who did not have the modern banking and investing facilities that we do today.

The Post Office Monthly Income Scheme (POMIS) is a savings scheme by the Indian Postal Department. It falls under the Ministry of Finance, therefore, it is highly reliable. It is one of the best monthly income schemes as it offers a low risk of investment.

The scheme provides investors with a fixed monthly income based on their investment. It is ideal for people who want a regular source of income and have a preference for low-risk investments.

Here are some features of the Post Office Monthly Income Scheme (POMIS) that you should know about:

Low-risk Investment

As a fixed-income scheme, any money that you invest in the Post Office Monthly Income Scheme is not subject to market risks and therefore, is safe.

Guaranteed Returns

The income that you earn every month is in the form of interest. It is not remarkably high, but it is still higher than other fixed-income schemes like Fixed Deposits.

Tax-Efficiency

Investments in the POMIS are not covered under Section 80C. Therefore, it is not liable for TDS.

Payout

You will start receiving your payments one month after investing your money in the Post Office Monthly Income Scheme. You will not get the money at the beginning of every month. Usually, the payouts are made towards the end of the month.

Fund Movement

The POMIS gives the option to move your funds to a Recurring Deposit (RD) account as well.

Nominee

The investors can nominate a beneficiary to their POMIS accounts. This makes the beneficiary liable to receive the benefits of the investment if the investor passes away during the term of the policy.

Reinvestment

Investors can reinvest their amount into the scheme for another 5-years order to enjoy further benefits of the Post Office Monthly Income Scheme. Now that they have a greater amount at hand, they can earn higher interest money.

Ease of Money Transaction

You may collect your monthly payout directly from the Post Office or have it transferred to your bank savings account. There is a significant ease of collecting and transferring money in the Post Office Monthly Income Scheme.

Joint Account

Under the POMIS, it is possible to open a joint account. This joint account can be held jointly by a maximum of 3 adults at a time. Therefore, in addition to having an individual account, investors can also have joint accounts under this scheme.

There are some Post Office Monthly Income Scheme eligibility criteria that you must fulfill to open a POMIS account. These criteria are as follows:

You must be a citizen of India.
You must be above 18 years of age.
The POMIS account can be of two types- individual or joint. A maximum of 3 adults can hold a joint account together.
The minimum investment amount in a POMIS account is Rs. 1500. The maximum amount is Rs. 4 Lakhs for individual accounts. Rs. 9 Lakh is the maximum amount for joint accounts.
This account will have a tenure of 5 years.
The applicants will need to provide valid KYC (Know Your Customer) documents like an Aadhaar card, PAN card, Voter ID card, Passport, or any other valid ID proof.
You can open an account on behalf of a minor aged 10 years or older. They can receive the funds when they are 18 or older.

There are two types of POMIS accounts that you can open- individual and group. Both of these types of accounts accept a minimum submission of Rs.1500.

For the individual account, the maximum amount of investment is Rs.4 Lakhs. For the joint account, the maximum amount of investment is Rs.9 Lakhs. A maximum of 3 adults can jointly hold this account at any given time.

How to Open a POMIS Account

Opening an account under the POMIS is an easy process. All you need to do is follow a few simple steps:

Go to the post office nearest to you. Ask for the POMIS account opening form.
Fill out the application form with all the details it asks you for. These would include your name, address, nominee’s name, etc.
Next, you will need to attach the necessary documents. These include KYC documents such as your Aadhaar Card, PAN card, Voter ID card, or any other valid government ID proof.
Now, you will need to make the deposit. A deposit of a maximum of Rs. 4 Lakh for individual accounts and Rs. 9 Lakh for joint accounts is allowed in the post office savings account.
Do not forget to collect the receipt of the deposit from the post office after you have submitted the amount.
Congratulations! You now have a working POMIS account from which you can start receiving a monthly income.

Interest Rates and Returns

The Government of India revises the interest rates on the POMIS from time to time. Investors receive monthly payouts, and this rate remains fixed for a tenure of 5 years.

The following table includes the current and previous interest rates-

Time Interval	POMIS Interest Rate (Per Annum)
From 1st January 2024	7.40%
1st October 2023 – 31st December 2023	7.40%
1st April 2023 – 30th June 2023	7.40%
1st January 2023 – 31st March 2023	7.10%
1st October 2022 – 31st December 2022	7.10%
1st April 2020 – 30th September 2020	6.60%
1st January 2020 – 31st March 2020	7.60%
1st October 2019 – 31st December 2019	7.60%
1st July 2019 – 30th September 2019	7.60%
1st January 2019 – 31st March 2019	7.70%

The Government of India revises the interest rates on the POMIS from time to time. This rate remains fixed for a tenure of 5 years and is paid out monthly to the investors.
At the end of each month, investors receive payouts calculated based on the monthly calculation of interest on the POMIS investment. The interest is computed based on the deposited amount in the investor’s POMIS account.

Post Office Monthly Income Scheme (POMIS) with Mutual Funds and Monthly Insurance

Aspect	Post Office MIS	Mutual Funds	Monthly Insurance
Type of Investment	Fixed-income scheme	Market-linked investment	Insurance-based savings plan
Risk Level	Low	Moderate to High	Low to Moderate
Guaranteed Returns	Yes	No	Yes
Tax-Efficiency	Partially (Not covered in 80C)	Yes	Yes
Tenure	5 years	No fixed tenure	Variable (Depends on Policy)
Withdrawal	Possible with penalties after 1 year	Can be withdrawn anytime	Varies based on policy terms
Nominee	Yes	Not applicable	Yes
Investments Amount Range	₹1,500 – ₹4,00,000	Varies	Varies
Interest Rate (As of Feb 2024)	7.40%	Varies	Varies

Tenure and Withdrawal

The tenure of Post Office Monthly Income Scheme (POMIS) accounts is 5 years. You cannot withdraw any amount from these accounts before one year from the deposit date has passed.

Closing the account between one year and three years of opening results in a 2% reduction from the deposit, with the remaining amount paid out. After three years, the Post Office keeps 1% of the deposit upon closure, with the rest refunded to the investor.

In the event of the account holder’s demise before maturity, the POMIS account can be closed, and the funds refunded to the legal heirs or nominees. In such a case, interest is paid up to the month before the refund is issued.

Reliable Path to Secure Monthly Income

In this article, you learned about the POMIS. We talked about how it is one of the best monthly income schemes, post office monthly income scheme eligibility, and the POMIS interest rate among other things.
The POMIS is a low-risk investment with guaranteed results. Therefore, it is quite popular among people. It is especially famous among the elder generation.
This article hopefully equipped you with the appropriate knowledge required to successfully open and operate a POMIS account.

Want to explore helpful techniques to save and grow your hard earned money? Dive in to our guide on Save Money.

Frequently Asked Questions (FAQ’s)

How can I open a POMIS account?

It is quite easy to open a POMIS account:
1. Get a POMIS form.
2. Fill in the details of the form.
3. Attach KYC documents.
4. Make the investment deposit.
5. Collect the receipt for the deposit.
Your POMIS account will be up and running at the successful completion of these steps.

What are the interest rates on POMIS accounts?

The latest interest rate on POMIS accounts is 6.6% per annum. This rate remains fixed for the 5-year tenure of the account. The monthly payouts based on basis of this interest rate.

How are returns calculated on POMIS accounts?

Returns on the monthly income scheme in the post office are calculated based on the interest rate offered by the government. This rate is fixed for the entire tenure of 5 years. The interest on the Post Office Monthly Income Scheme investment is calculated monthly and paid out to the investors at the end of each month. This interest is calculated on the amount deposited by the investor in their POMIS account.

How does the tenure of POMIS accounts work?

The tenure of POMIS accounts is 5 years. You cannot withdraw any amount from these accounts before one year from the deposit date has passed. If you close the account within 1-3 years of opening, a 2% reduction is applied to the deposited amount. After 3 years, closing the account before maturity will result in a 1% reduction.