The Post Office Monthly Income Scheme (POMIS) is a reliable and low-risk investment plan offered by India Post. It is designed for individuals who seek regular monthly income through a secure, government-backed savings scheme. With fixed interest payouts, this scheme is an ideal choice for retirees, homemakers, and risk-averse investors.
If you are looking for a safe and steady source of passive income, POMIS is worth considering. This guide will walk you through everything you need to know, including interest rates, benefits, eligibility criteria, and how to apply.
Post Office Monthly Income Scheme (POMIS)
| Feature | Details |
|---|---|
| Current Interest Rate | 7.4% per annum (as of Q1 2024) |
| Interest Payout | Monthly |
| Minimum Investment | ₹1,000 |
| Maximum Investment | ₹9 lakh (individual), ₹15 lakh (joint) |
| Lock-in Period | 5 years |
| Premature Withdrawal | Allowed with penalty |
| Taxability | Interest taxable; No TDS |
| Official Website | India Post |
The Post Office Monthly Income Scheme (POMIS) is one of the safest investment options for individuals seeking regular income without market risks. With guaranteed returns, government backing, and flexible investment limits, it is an excellent choice for retirees, homemakers, and conservative investors.
While POMIS does not offer tax benefits, its stable monthly payouts make it an attractive choice for anyone looking to build a steady passive income stream.
What is the Post Office Monthly Income Scheme (POMIS)?
The Post Office Monthly Income Scheme (POMIS) is a fixed-income investment plan that provides guaranteed monthly interest on a lump sum deposit. It is one of the safest investment options available in India, as it is backed by the Government of India.
Unlike volatile investment options like stocks and mutual funds, POMIS ensures stable returns, making it a preferred choice for individuals who need regular payouts to cover expenses.
How Does POMIS Work?
- You deposit a lump sum in a POMIS account.
- The post office pays you interest every month based on the deposited amount.
- After 5 years, you can withdraw the principal amount or reinvest it in a new POMIS account.
- If needed, you can prematurely withdraw after 1 year, but with a penalty.
Current Interest Rate of POMIS (2024)
As of January – March 2024, the interest rate for POMIS is 7.4% per annum. The interest is calculated monthly and credited directly to the investor’s savings account linked with the post office.
For example:
- If you invest ₹5 lakh, your monthly income will be ₹3,083.
- If you invest ₹9 lakh, your monthly income will be ₹5,550.
Who is Eligible to Invest in POMIS?
- Indian residents (NRIs are not eligible).
- Individuals above 10 years can open an account.
- Minors above 10 years can have a guardian-operated account.
- Joint accounts (up to 3 people) can be opened.
Deposit Limits and Rules
- Minimum deposit: ₹1,000 (multiples of ₹1,000)
- Maximum deposit:
- ₹9 lakh for individual accounts
- ₹15 lakh for joint accounts
If you already have a POMIS account, the total deposits across all accounts cannot exceed the maximum limit.
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How to Open a POMIS Account?
Opening a POMIS account is simple. Follow these steps:
Step 1: Visit the Post Office
- Go to your nearest India Post branch.
- Request the POMIS account opening form.
Step 2: Provide Required Documents
- Aadhaar Card (identity proof)
- PAN Card (for tax compliance)
- Address proof (utility bill, ration card, etc.)
- Passport-sized photographs
- Post Office Savings Account details (to receive interest payouts)
Step 3: Make the Deposit
- Deposit cash or issue a cheque for the investment amount.
- For cheque deposits, the date of cheque clearance is considered the account opening date.
Step 4: Get the Account Passbook
- The post office provides a POMIS passbook containing account details and deposit confirmation.
- Interest is automatically credited to your savings account every month.
Premature Withdrawal Rules
- Before 1 year: No withdrawal allowed.
- 1 – 3 years: 2% penalty on the deposit amount.
- 3 – 5 years: 1% penalty on the deposit amount.
Tax Implications of POMIS
- Interest is fully taxable under “Income from Other Sources.”
- No TDS (Tax Deducted at Source) is applied.
- No tax benefits under Section 80C.
If you fall in a higher tax bracket, consider reinvesting the interest in tax-saving instruments like PPF or ELSS mutual funds.
Alternative Investment Options
If you are looking for alternative investments with similar benefits, consider:
- Senior Citizens’ Savings Scheme (SCSS): Higher interest rate for retirees.
- Fixed Deposits (FDs): More flexibility but variable interest rates.
- RBI Floating Rate Bonds: Market-linked returns with a 7-year lock-in.
- Mutual Funds: Higher returns with associated risks.
Pros and Cons of POMIS
Pros
- Guaranteed returns (fixed monthly income)
- Zero risk (Government-backed scheme)
- No market fluctuations
- Flexible investment limits
- Joint account option
Cons
- Lock-in period of 5 years
- No tax benefits
- Penalties on early withdrawal
FAQs On Post Office Monthly Income Scheme (POMIS)
1. Can I open multiple POMIS accounts?
Yes, but the total deposits across all accounts cannot exceed ₹9 lakh (individual) or ₹15 lakh (joint).
2. Can I transfer my POMIS account to another post office?
Yes, you can transfer the account to any other post office in India.
3. Is POMIS better than a Fixed Deposit (FD)?
- POMIS offers fixed monthly interest, while FD interest is paid quarterly/annually.
- POMIS has a 5-year lock-in, while FDs offer flexible tenures.
- FDs may offer higher rates, but POMIS provides stability and government backing.
4. What happens after the 5-year maturity?
You can:
- Withdraw the full amount
- Reinvest in a new POMIS account
- Transfer the amount to a savings account
