The Post Office Monthly Income Scheme (POMIS) is a government of India-backed secured small savings scheme designed to offer individuals a reliable source of monthly income. It is particularly popular among retirees, homemakers, and risk-averse investors who seek stable returns with minimal risk. Government employees, PSUs and Private sector employees may take benefit of this scheme. This scheme is open for residents of India. POMIS is operated and maintained by the Department of Posts under the Ministry of Communications, this scheme provides an excellent way to earn assured monthly income through regular interest payouts.
Key Features of POMIS
- Guaranteed Returns
POMIS provides a fixed interest rate on the amount deposited in the scheme, currently fixed at 7.4% per annum. The interest rate is reviewed quarterly by the government. - Eligibility
- Individuals must be Indian residents.
- The minimum age to invest is 18 years.
- Minors (aged 10 years or above) can also open an account under guardianship.
- Investment Limits
- Minimum deposit: ₹1,500
- Maximum deposit:
- ₹9 lakh for a single account
- ₹15 lakh for a joint account (maximum 3 account holders)
- Account Tenure
The account matures in 5 years from the date of opening. Upon maturity, the principal amount is returned to the investor. - Interest Payout
Interest is paid monthly, offering a steady stream of income. The Interest can be collected from post office branch individually or transferred to account directly. - Re-Investment
You can reinvest the maturity amount again into the post office, even the interest paid monthly can also be reinvested in to other saving schemes.
Benefits of POMIS
1. Risk-Free Investment
Being a government-backed scheme, POMIS eliminates market volatility, making it a safe investment option.
2. Steady Income
The scheme ensures consistent monthly payouts, making it ideal for retirees or individuals seeking additional income.
3. Tax Benefits
- The invested principal amount is not tax-deductible under Section 80C of the Income Tax Act.
- Interest earned is fully taxable, but it remains attractive due to its assured nature.
4. Nomination Facility
Investors can nominate a beneficiary, ensuring smooth transfer of funds in case of unforeseen circumstances.
How POMIS Works?
- Open a POMIS account at your nearest post office by filling out the application form and submitting identity proof, address proof, and passport-sized photographs.
- Deposit the desired amount within the permissible limits.
- Start receiving monthly interest payouts either via direct credit to your post office savings account or by auto-transfer to a linked bank account.
| Interest payable | Rates | Periodicity |
| Effective interest rates from 01.01.2024 | 7.4 % per annum | Payable Monthly |
Who can open POMIS Account?
- A single adult
(ii) Joint Account (Maximum 3 adults)
(iii)A guardian on behalf of minor/ person of unsound mind
(iv) A child above 10 years of age in his own name.
How to open POMIS Account?
- Visit your nearest India Post Office Branch
- Ask the postmaster/dealing staff for opening of POMIS Account
- Collect form
- Deposit filled form along with requisite documents, PAN Card, proof of residence, birth certificate in case of minor, carry your Aadhaar card in original and copy (they may ask for verification). Please check that your name and date of birth match correctly in all the documents you submit.
- Once account is opened you have to deposit the amount as per guidance of the postmaster/dealing staff. Always take receipts for deposit and keep it safe.
| Minimum and Maximum limit for opening of POMIS account |
| 1. Amount can be invested in the multiples of ₹ 1000/-. 2. Maximum investment limit is ₹ 9 lakh in single account and ₹ 15 lakh in joint account. 3. An individual can invest maximum amount of ₹ 9 lakh in MIS (including his share in joint accounts). 4. As per the guidelines of the scheme the individual investors in joint account have equal share over the investment amount (each joint holder have equal share in joint account). |
Who Should Invest in POMIS?
POMIS is an excellent choice for:
- Retirees: Government/PSU/Private employees seeking regular income to meet daily expenses.
- Homemakers: Looking for a stable and secure investment option.
- Risk-Averse Investors: The investors who prefer guaranteed returns over market-linked schemes.
Limitations of POMIS Scheme
- No Tax-Free Returns
Interest earned is taxable, which might reduce the effective yield for investors in higher tax brackets. - Lack of Liquidity
Premature withdrawals are allowed but subject to penalties:- 2% deduction if withdrawn between 1–3 years.
- 1% deduction if withdrawn between 3–5 years.
- No penalty if withdrawn after 5 years.
- Limited Growth Potential
Unlike Stocks, Mutual funds or other equity investments, POMIS offers limited scope for capital appreciation. The Appreciation of Capital is conservative in nature.
Pre-mature closure of POMIS Account
1. The amount deposited cannot be withdrawn before completion of one year from the date of deposit.
2. If account is closed after 1 year and before 3 year from the date of POMIS account opening, a deduction equal to 2% from the principal amount will be deducted and remaining amount will be paid to the depositor.
3. If account closed after 3 year and before 5 year from the date of POMIS account opening, a deduction equal to 1% from the principal amount will be deducted and remaining amount will be paid to the depositor.
4. POMIS Account can be prematurely closed by submitting the prescribed application form with pass book at concerned Post Office Branch.
Payment after maturity of POMIS
1. Account may be closed on expiry of 5 years from the date of opening by submitting prescribed application form with pass book at concerned Post Office.
2. In case the account holder dies before the maturity, the account may be closed and amount will be refunded to nominee/legal heirs. Interest will be paid up to the preceding month, in which refund is made.
Comparison with Similar Investment Schemes
| Feature | POMIS | SCSS (Senior Citizens Savings Scheme) | Fixed Deposits (FDs) |
| Interest Rate | 7.4% | 8.2% | Varies by bank (6–7%) |
| Tenure | 5 years | 5 years | Flexible |
| Tax Benefits | None | Section 80C (up to ₹1.5 lakh) | Section 80C (up to ₹1.5 lakh) |
| Withdrawal Penalty | Yes | Yes | Yes |
Why Use a POMIS Calculator?
To maximize returns, a POMIS calculator is a handy tool that helps you:
- Estimate monthly interest payouts.
- Plan your investments better by visualizing returns.
- Compare it with other investment options to make informed decisions.
Conclusion
The Post Office Monthly Income Scheme offers a perfect blend of safety, reliability, and consistent income, making it a great option for individuals who prioritize financial stability over high-risk, high-reward investments. While it may not offer significant tax benefits, its assured returns and ease of use make it an enduring favorite among conservative investors. Whether you’re planning for retirement or seeking supplemental income, POMIS is worth considering as part of a diversified financial portfolio.