For those looking to invest in a safe scheme with a guaranteed monthly income, the Post Office Monthly Income Scheme (POMIS) could be an ideal choice. Backed by the Government of India, this scheme offers assured returns and is perfect for individuals seeking a reliable income stream without frequent investments.
Here’s a breakdown of everything you need to know about this scheme, from eligibility and interest rates to monthly earnings and withdrawal rules.
How the Post Office Monthly Income Scheme Works
The Post Office Monthly Income Scheme is designed to provide regular income through monthly interest payments. You only need to invest once, and the scheme ensures that you receive a fixed amount each month, making it a great choice for retirees or anyone looking for consistent income.
Interest Rate
The current interest rate on POMIS is 7.4% per annum, which is higher than what many savings accounts or bank fixed deposits (FDs) offer. This interest is calculated annually but is paid monthly, meaning you don’t have to wait to access the returns.
Eligibility and Account Types
POMIS offers flexibility when it comes to opening accounts, with options suitable for both individual and joint accounts. Here are the different ways you can open an account:
- Single Account: Any adult can open an individual POMIS account.
- Joint Account: Up to three adults can open a joint account, with each having an equal share in the investment.
- Guardian Account: Guardians can open an account for minors, and children aged 10 or older can have accounts in their name.
This flexibility makes POMIS a great fit for families and couples who want to invest together or parents looking to secure future funds for their children.
Key Features and Investment Limits
The scheme comes with specific deposit requirements, making it easy to understand how much you’ll need to invest to earn a steady income:
- Minimum Investment: ₹1,000
- Maximum Investment in Single Account: ₹9 lakh
- Maximum Investment in Joint Account: ₹15 lakh
Deposits are accepted in multiples of ₹1,000, so you can invest according to your financial comfort within the allowed limits.
Monthly Income: How Much You Can Earn
Here’s how your investment in POMIS translates into monthly earnings:
- For Joint Account
- Maximum Investment: ₹15 lakh
- Interest Rate: 7.4% per annum
- Annual Interest: ₹1,11,000
- Monthly Income: ₹9,250
- For Single Account
- Maximum Investment: ₹9 lakh
- Interest Rate: 7.4% per annum
- Annual Interest: ₹66,600
- Monthly Income: ₹5,550
These monthly payouts make POMIS a dependable source of income, especially for those who are not interested in market-linked investments and want predictable returns.
How Interest is Paid Out
Interest earned on the POMIS account is divided into monthly installments. You can choose to withdraw this amount every month or let it stay in your post office savings account. If the interest remains unwithdrawn, it will continue to earn additional interest along with the principal amount, boosting your overall returns.
Account Maturity and Extension Options
POMIS has a maturity period of five years. Once it matures, you have the choice to extend it as per the current interest rate. If you decide not to extend, the entire deposited amount is returned. Many investors find this feature helpful, as it gives them a chance to reassess their investment strategy every five years.
Rules for Premature Closure and Withdrawal
While the POMIS offers stable income, you do have the flexibility to close the account before the five-year term in case of financial needs. However, some deductions apply based on the closure time:
- No Withdrawal Before 1 Year: Account holders cannot withdraw any amount within the first year.
- Between 1-3 Years: If the account is closed after 1 year but before 3 years, a 2% deduction is made on the principal amount.
- Between 3-5 Years: For accounts closed after 3 years but before 5 years, a 1% deduction applies.
These rules help discourage early withdrawal while giving account holders the option to access funds if needed.
Benefits of Investing in POMIS Over Other Schemes
- Government-Backed Security: POMIS is fully supported by the Government of India, ensuring safety and reliability, especially compared to riskier investment options.
- Better Returns than FDs: With a 7.4% interest rate, POMIS offers higher returns than many fixed deposit options, making it attractive for conservative investors.
- Low-Risk Income Source: The scheme is ideal for those seeking a steady, low-risk income source without worrying about market fluctuations.
By investing in the Post Office Monthly Income Scheme, you can set up a regular monthly income with just a single deposit, giving you peace of mind and financial stability over the long term.
