POMIS- Features and Benefits of Post Office Monthly Income Scheme

Are you searching for safer ways to invest and, thus, grow your money?

You must consider the Post Office Monthly Income Scheme (POMIS). It is a safe monthly income scheme in the post office, which is backed by the Indian Finance Ministry.

The Post Office Depository provides various savings schemes featuring fixed interest rates. One of the most lucrative options is the Post Office Monthly Income Scheme, boasting an interest rate of 7.4%, alongside other schemes like the Post Office Recurring Deposit, Post Office Savings Account and Post Office Time Deposit.

Let’s explore the POMIS scheme, learn about the features of MIS (monthly income scheme), and discover the benefits of investing in this post office monthly income scheme.

What is the POMIS Scheme?

Introduced in 1987, the Post Office Monthly Income Scheme (POMIS) offers a fixed interest rate. It provides a reliable income source and ensures the protection of your invested capital. Recognised and validated by the Ministry of Finance, POMIS is considered one of the highest-earning investment schemes, currently offering an interest rate of 7.4% as of September 30, 2023.

Features of MIS- Monthly Income Scheme

1. Maturity Period: The maximum duration of the Indian Post Office Monthly Income Scheme (POMIS) is 5 years.

2. Number of Holders: The scheme allows for a minimum of 1 and a maximum of 3 individuals to hold a Post Office MIS account.

3. Nomination: Only the nominee designated by the account holder will receive all scheme benefits in the event of the investor’s demise. Nomination can be assigned after opening an account.

4. Transfer: Account holders have the flexibility to transfer their MIS account from one post office to another anywhere in India.

5. POMIS Bonus: Accounts opened after December 1, 2011, do not enjoy a bonus facility, while those opened before that date receive a 5% bonus.

6. Taxability: Income from this scheme is not subject to TDS (Tax Deducted at Source). POMIS- Post Office Monthly Income Scheme does not provide tax benefits.

Eligibility for Post Office Monthly Scheme

To open a Post Office Monthly Scheme, the following individuals are eligible:

1. The applicant must be a citizen of India.
2. Single Adult:

• Any unmarried individual seeking to invest independently.

3. Joint Account (up to 3 adults):

• A group of up to three adults can open a Joint Account, identified as Joint A or Joint B.

4. Guardian on Behalf of Minor/Person of Unsound Mind:

• Individuals acting as guardians for minors or those with unsound minds can open an account on their behalf.

5. Minor Above 10 Years in Their Own Name:

• Minors aged 10 and above are eligible to open an account in their own name.

Upon reaching the age of 18, individuals will gain access to the fund.

Minimum Deposit for Post Office Monthly Scheme

1. Opening Amount:

• The Monthly Income Scheme account can be started with a minimum deposit of Rs. 1000, and additional deposits must be made in increments of Rs. 1000.

2. Maximum Deposit Limits:

• A single account can accumulate a maximum of Rs. 9 lakh, while a Joint account can hold up to Rs. 15 lakh.

3. Equal Share in Joint Account:

• In a joint account, all joint holders share the investment equally.

4. Individual Deposit Limit:

• Deposits or shares in all Monthly Income Scheme (MIS) accounts opened by an individual should not exceed Rs. 9 lakh.

5. Separate Limit for Minor Accounts:

• The limit for accounts opened on behalf of a minor, with a guardian, is separate

Post Office Monthly Income Scheme Interest Rate Guidelines

1. Monthly Interest Payment:

• Interest is payable on completion of a month from the date of opening and continues until maturity.

2. Unclaimed Monthly Interest:

• If you do not claim and take out the interest each month, no additional interest will be earned.

3. Refund of Excess Deposit:

• In the event of any excess deposit made by the depositor, the excess amount will be refunded. Only PO Savings Account interest will apply from the date of account opening to the date of refund.

4. Interest Withdrawal Options:

• You can get the interest in two ways: either it automatically goes into the savings account at the same post office, or it can be credited to a savings account at any CBS Post Office through ECS (Electronic Clearing Service) for Monthly Income Scheme (MIS) accounts at CBS Post offices.

Consequences of Early Closure of the POMIS Scheme

Conditions for Pre-mature Closure	Deductions and Refund Process
No deposit withdrawal before 1 year	NIL
Account closure after 1 year and before 3 years	Deduction of 2% from the principal, and the remaining amount will be paid.
Account closure after 3 years and before 5 years	Deduction of 1% from the principal, and the remaining amount will be paid.

The premature closure of an account can be initiated by submitting the designated application form along with the passbook to the relevant post office.

Maturity Conditions under MIS

The account can be terminated upon the completion of five years from the opening date by submitting the required application form along with the passbook at the respective Post Office.

Closure and Refund Process in case of the account holder’s death before maturity:

In the case when the account holder dies before the actual maturity date, the account can be closed, and the funds will be reimbursed to the nominee or legal heirs. Interest will be disbursed up to the month prior to the refund. 

How to Open a POMIS Account

Follow these simple steps to get started with a Post Office Monthly Income Scheme (POMIS) account:

1. Open a Post Office Savings Account:

• If you don’t have a post office savings account already, you need to open one. This can be done by visiting your local post office.

2. Collect POMIS Application Form:

• Obtain a POMIS application form from the nearest post office. You can also download it from- https://www.indiapost.gov.in/VAS/DOP_PDFFiles/form/Accountopening.pdf

3. Submit Required Documents:

• Fill out the POMIS application form with the necessary details. Attach a photocopy of your identification and residential proofs, and provide two passport-size photos. Remember to carry the originals of these documents for verification.

4. Witness or Nominee Signatures:

• Obtain the signatures of your witness or nominee(s) on the application form. This step is essential for the completion of the application process.

5. Make Initial Deposit:

• Make an initial deposit of ₹1000 for your POMIS account using either cash or a cheque.

Documentation Required for Opening POMIS Account

To open a Post Office Monthly Income Scheme (POMIS) account, you will need the following documents:

1. Identity Proof:

• Copy of a government-issued ID such as a Passport, Voter ID card, Driving License, Aadhaar card, etc. 

2. Address Proof:

• Government-issued ID or recent utility bills (such as electricity or water bills) that confirm your residential address. 

3. Photographs:

• Provide passport-size photographs along with your application. These photographs are required for the official records associated with your POMIS account.

Benefits of Post Office Monthly Income Scheme- POMIS

1. Steady and Reliable Income:

• POMIS provides a fixed interest rate, ensuring a steady and reliable monthly income for investors.

2. Capital Protection:

• The scheme offers capital protection, assuring investors that their principal amount remains safe throughout the investment period.

3. Government Backing:

• POMIS is backed by the Indian Finance Ministry, adding a layer of trust and reliability to the investment.

4. Ease of Investment:

• With a minimum deposit requirement of Rs. 1000, POMIS is accessible to a wide range of investors, making it an easy and straightforward investment option.

5. Flexibility in Account Holding:

• The scheme allows for both individual and joint account holdings, accommodating various investor preferences and needs.

6. Nomination Facility:

• Investors can nominate a beneficiary to ensure a smooth transition of benefits in the unfortunate event of the investor’s demise.

7. Transferability:

• Account holders have the flexibility to transfer their MIS account from one post office to another anywhere in India, providing convenience and adaptability.

8. Tax Advantages:

• POMIS offers tax benefits, as the income from the scheme is not subject to TDS (Tax Deducted at Source). However, it’s essential to note that the interest earned is taxable in the hands of the depositor.

Comparing Post Office Savings Schemes: POMIS, PPF, and NSC

Scheme	Full Form	Interest Rate	Tax Benefits	Maturity Period	Withdrawal Rules
POMIS	Post Office Monthly Income Scheme	7.4% p.a.	No tax deduction on investment or interest	5 years	Premature withdrawal allowed after 1 year with penalty
NSC	National Savings Certificate	7.7 % compounded annually but payable at maturity.	Tax deduction on investment, interest taxable	5 years	No premature withdrawal allowed
PPF	Public Provident Fund	7.1% p.a.	Tax deduction up to Rs. 1.5 lakh under Section 80C	15 years	Partial withdrawal allowed from 7th year onwards

These schemes are popular tax-saving investment options available under Section 80C of the Income Tax Act, 1961. 

FAQs | Post Office Monthly Income Scheme

Source- indiapost.gov.in/

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Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.