The Post Office Monthly Income Scheme (POMIS) remains a popular and secure investment option for individuals seeking a steady monthly income. With a government-backed guarantee and a fixed interest rate, POMIS offers a reliable avenue for risk-averse investors, particularly senior citizens and those looking for financial stability.
Understanding POMIS
The Post Office Monthly Income Scheme is a savings plan offered by India Post, designed to provide a fixed monthly payout to investors. It involves depositing a lump sum amount, and in return, the investor receives a fixed interest every month until the scheme matures. The scheme is recognized and validated by the Ministry of Finance, adding to its credibility and security.
Interest Rate and Calculation
As of November 2025, the interest rate for POMIS stands at 7.4% per annum, payable monthly. This rate is subject to change, as the Finance Ministry revises it every quarter based on the returns generated by government bonds of similar maturity.
To illustrate, if an individual deposits ₹4 lakh in the scheme, their monthly interest income would be approximately ₹2,466.67. This is calculated using the formula: (Amount Invested * Annual Rate of Interest) / 12. For example: (400,000 * 0.074) / 12 = 2,466.67. Several online POMIS calculators are available to easily compute monthly earnings based on the invested amount and prevailing interest rate.
Investment Limits and Account Types
The minimum investment required to open a POMIS account is ₹1,000. The maximum investment limit is ₹9 lakh for a single account and ₹15 lakh for a joint account. The scheme allows for single, joint (up to three adults), and minor accounts (where a guardian invests on behalf of a minor).
Key Features and Benefits
- Guaranteed Returns: Being a government-backed scheme, POMIS offers assured and risk-free returns.
- Steady Income: It provides a fixed monthly payout, ensuring financial stability, especially for those with limited income sources.
- Capital Protection: The invested amount remains safe until maturity.
- Flexibility: The account can be transferred from one post office to another across India.
- Nomination Facility: Investors can nominate beneficiaries, ensuring a smooth transfer of benefits in case of their demise.
- Auto Credit Facility: The monthly interest can be automatically credited to a savings account held with the post office or through ECS (Electronic Clearing Service).
Premature Withdrawal Rules
While the lock-in period for POMIS is 5 years, premature withdrawal is permitted under certain conditions. No withdrawal is allowed within the first year of account opening. If the account is closed after 1 year but before 3 years, a deduction of 2% is applied to the principal amount. If the account is closed after 3 years but before 5 years, a deduction of 1% is applied.
How to Open a POMIS Account
To open a POMIS account, one needs to visit a post office and submit the required documents, including:
- Account opening form
- KYC (Know Your Customer) documents such as proof of identity and address (Aadhaar card, PAN card, etc.)
- Cheque or cash for the initial investment
Taxation
The interest earned from POMIS is taxable, and it does not qualify for any tax deduction under Section 80C of the Income Tax Act. However, a deduction of up to ₹10,000 can be claimed under Section 80TTA for interest earned on savings accounts, including post office savings accounts.
POMIS vs. Other Investment Options
Compared to other investment options, POMIS offers a blend of security and steady income. While debt mutual funds might offer potentially higher returns, they come with market risks. Fixed deposits offer guaranteed returns but may have varying interest rates and tax implications. POMIS stands out as a low-risk, government-backed scheme suitable for those prioritizing safety and regular income.
