Like most banks in India, the Post Office is also a reliable place to deposit money and undergo other transactions. You will particularly find the elder generation frequenting the Post Office as it offers the Post Office Monthly Income Scheme (POMIS) with really profitable interest rates across the country.

You can invest a certain amount under POMIS and enjoy a fixed interest every single month with pretty high-interest rates compared to most banks. And you can operate this from any post office in India.

 

Post Office Saving Schemes – Interest Rates & Tax Implications

What is POMIS?

The Post Office offers POMIS: Post Office Monthly Income Scheme to Indian residents of all ages. It’s not only a reliable scheme but also assures a low-risk MIS, and further helps people earn a steady monthly income with a high-interest rate.

If you invest up to Rs. 4.5 lakh individually or Rs. 9 lakh jointly for a tenure of 5 years, you can earn an interest rate of 6.6% per annum, which will be paid to you every single month till the end of your tenure.

Advantages & Key Features of POMIS:

  • Capital protection: Safe until maturity.
  • Tenure: 5 years lock-in period and withdrawal on maturity.
  • Low-risk investment: Your investment is not subject to market risk.
  • Affordable deposit amount: 1,000 rupees minimum investment is possible.
  • Guaranteed returns: Monthly interest with a higher return than Fixed Deposit.
  • Tax-efficiency: Investment not covered & TDS isn’t applicable
  • Payout: Upon completion of one month after first investment.
  • Multiple account ownership: Open more accounts without exceeding 4.5 lakh rupees
  • Joint account: Open an account with 2 or 3 people without exceeding 9 lakh rupees
  • Fund movement: A new feature allows investors to move funds to a Recurring Deposit account
  • Nominee: The account holder can nominate a beneficiary
  • Ease of money/interest transaction: Collect income from the Post Office directly or get it wired to your bank account. Also, reinvesting the interest in SIP is a sure possibility.
  • Reinvestment: Extend another 5 years tenure to earn more by reinvesting.

What are the Eligibility Criteria for POMIS account holders?

  1. Residents are permitted to open an account.
  2. Non-resident Indians aren’t permitted to enjoy the benefits of POMIS scheme.
  3. Adult Indian citizens are permitted to open an account.
  4. You can also open an account on behalf of minors, who are 10 years and above, but their funds will be available for use only upon turning 18 years of age.

POMIS Account: A Step-By-Step Guide

POMIS account can easily be opened at your nearest Post Office. Simply follow our step-by-step procedure to create an account without any hassle.

  1. First, open a savings account.
  2. Then get the application form (POMIS) from the PO.
  3. Submit your form including your residential proof, 1 photocopy of your ID, & 2 photos (passport-size). Keep the originals with you for verification.
  4. Get your witness or nominees’ signature on the form.
  5. Deposit money in cash or cheque. (You can enquire at the reception about the post-dated cheques. The date mentioned on the cheque is usually the date of opening the POMIS account.
  6. Upon completion of the procedure, an executive will give you all the details of your new POMIS account.

Monthly Income Plan: Post Office MIS Vs Mutual Fund Vs Insurance

POMIS

Mutual Fund

Insurance

Rate of 6.6% p.a.

No guarantee

Monthly annuities

Zero TDS

TDS

Annuity

Fixed-rate

No fixed rate

NA

Lower risk

Higher risk

Double benefits

Withdrawal allowed post 12 months with penalty

Exit charge applicable upon before-time withdrawal

Higher surrender charges

Limit of Rs. 4.5 lakhs for an individual & Rs. 9 lakhs for a joint account

No limit on how much to invest

No limit on how much to invest

FAQS about the Post Office Monthly Income Scheme (POMIS):

Will senior citizens benefit from this POMIS scheme?

Yes, the POMIS scheme will help senior citizens earn interest on a recurring monthly basis upon depositing some money, which could even be their life savings.
How’s a single account holder's share calculated in the case of a joint account?

It is pretty simple and fair. Each of the joint account holders enjoys equal shares.

What'll happen to my account if I shift from one place to another?

There’s no need to worry because you can easily transfer your account to another Post Office branch without being charged any additional cost.

What if you don't want to encash your deposit upon the maturity of the account?

In this case, your deposit amount will remain seated in the account and earn interest, as per the Post Office Savings Account, for the consecutive years from the account maturity.

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