Post Office Monthly Income Scheme (POMIS) is an investment avenue where you can deposit certain amount of money and earn monthly interest on the same. As the name suggests POMIS is offered by Post Offices. In 2019 (Jul to Sep) Post Office MIS interest rate are 7.6%. The investment is safe and backed by Government of India. The post gives the details about the POMIS.
Post Office MIS Interest Rate
As with all other Small Saving Schemes like PPF, SCSS, Post Office RD, POMIS rates are also declared every quarter. The Post Office MIS Interest Rate for 2019 (Jul to Sep) are 7.6%. Interests are paid monthly under this scheme. There is no additional interest for senior citizens.
Also Read: 13 Investments to Generate Regular Income
Post Office MIS Scheme – Features
Who can open POMIS Account?
Any adult (more than 18 years of age) Indian can open Post Office MIS Account. This can be either on one or joint names.
Accounts can also be opened by minor with more than 10 years of age along with an adult (parents or legal guardian). The maximum investment in the name of minor cannot exceed Rs 3 lakhs.
You must also have or open Post Office Savings account where the monthly interest payment would be credited.
NRIs are not eligible to open Post Office MIS.
Nomination can be done at the time of account opening or afterwards.
Post Office MIS still cannot be opened online.
If required the account can be transferred from one post office to other.
Post Office MIS Investment Rules:
The maximum investment limit is Rs 4.5 lakh for individuals and Rs 9 lakh in case of joint account.
The minimum investment amount is Rs 1,500 (Investment can be made in multiples of 1500)
The tenure for Post Office MIS is 5 years and can be extended to another 5 years on maturity.
On maturity, the principal amount is returned back to the investor.
For e.g. If I deposit Rs 4.5 Lakh in Post Office MIS at 7.7% interest, I would get monthly interest income of Rs 2,888 (4,50,000 x (7.7%/12)). At the end of 5 years I would be paid back entire Rs 4.5 Lakh.
You can have multiple POMIS account but the deposit amount across all accounts cannot exceed Rs 4.5 Lakhs
The money for initial deposit can be in cash, cheque or demand draft. However, in case of cheque or demand draft, the date of account opening is the day they get encashed.
On request, the monthly interest from POMIS can also be automatically invested in Post Office RD scheme.
Premature closure of POMIS is allowed after completion of 1 year. If the account is closed between 1 to 3 years, 2% of the deposited amount is deducted as penalty. The penalty is 1% if the POMIS is closed after 3 years.
Tax on Post Office MIS Scheme:
There is NO TDS on the Post Office MIS. However, the interest received is fully taxable at applicable marginal income tax rates.
Effective April 1, 2018 Interest income up to Rs 50,000 is exempted from tax for Senior citizens u/s 80TTB [Budget 2018]
Post Office MIS Interest Rate History:
Post Offices started offering Monthly Income Scheme from 1987 and the table below gives the interest rate since then for different tenures.
The highest interest ever offered was 14% for 5 years POMIS from 24th April 1992 to 1st Sep 1993.
After April 1, 2016 – Quarterly Interest Reset:
|Financial year||Apr – Jun||Jul – Sep||Oct – Dec||Jan – Mar|
|2019 – 20||7.70%||7.60%|
|2018 – 19||7.30%||7.30%||7.70%||7.70%|
|2017 – 18||7.60%||7.50%||7.50%||7.30%|
|2016 – 17||7.80%||7.80%||7.70%||7.70%|
Also Read: Best Tax Saving Investments u/s 80C
Before April 1, 2016:
|Time Period||Interest Rate|
|15 Aug 1987 to 23 April 1992||12.00%|
|24 April 1992 to 1 Sep 1993||14.00%|
|2 Sep 1993 to 31 Dec 1998||13.00%|
|1 Jan 1999 to 14 Jan 2000||12.00%|
|15 Jan 2000 to 28 Feb 2001||11.00%|
|1 March 2001 to 28 Feb 2002||9.50%|
|1 March 2002 to 28 Feb 2003||9.00%|
|1 March 2003 to 30 Nov 2011||8.00%|
|1 Dec 2011 to 31 March 2012||8.20%|
|1 April 2012 to 31 March 2013||8.50%|
|1 April 2013 to 31 March 2014||8.40%|
Should you Invest in Post Office MIS?
Post Office MIS is safe and offers monthly interest income. The income is guaranteed too. The interest rates offered by Post Office MIS are generally higher than most Nationalized banks FD (with monthly payout). However, the process of investment requires physical visit to the post office and paperwork. Also with maximum investment limit of Rs 4.5 lakh, you can get maximum of Rs 3,000 as monthly income which is not much. Taking all this into consideration Post Office MIS is good investment option for someone looking to generate limited monthly income with no risk.