Post Office Monthly Income Scheme: All You Need To Know To Grow Money Safely

The Post Office Monthly Income Scheme (MIS) is a safe investment option that provides a steady income. This scheme is popular in India for its low risk and government backing, ensuring the safety of invested funds. The MIS pays monthly interest and is suitable for those looking for regular or additional income without exposure to market risks.

Who Can Open an MIS Account?

• Single adults
• Joint accounts with up to 3 adults (Joint A or Joint B)
• Guardians on behalf of minors or individuals of unsound mind
• Minors above 10 years old in their name

Documentation Required

• Identity Proof: Copy of government-issued ID such as Passport / Voter ID card / Driving License/Aadhaar, etc.
• Address Proof: Government-issued ID or recent utility bills.
• Photographs: Passport-size photographs

How does POMIS Calculation Work?

After opening the account, investors need to make suitable investments:

• For a single account, the minimum investment is Rs. 1,000, and the maximum is Rs. 4.5 lakh.
• For a joint account, the minimum investment is Rs. 1,000, and the maximum is Rs. 9 lakh.

Example: Investing Rs. 1,00,000 for 5 years at an annual interest rate of 6.60% provides a fixed monthly income of Rs. 550. At the end of the scheme, the deposited money is returned.

Key Features of the Post Office MIS

1. Low Risk: Offers guaranteed returns with minimal risk.
2. Flexible Investment: Start with just Rs 1,000 and watch your investment grow.
3. 5-Year Lock-in Period: Funds are locked in for 5 years, but you can reinvest after maturity.
4. Tax Implications: Not eligible for tax benefits under section 80C, and the income is taxable, but no TDS deduction.
5. Maximum Investment Limits: Up to INR 4.5 lakh in a single account and INR 9 lakh in a joint account.
6. Individual investment limit: Up to INR 4.5 lakh in MIS, including the share in joint accounts. Each joint holder has an equal share in the account.
7. Nomination Facility – Nominee facility available and can be updated later after opening an account by a beneficiary (i.e. a family member). However, the beneficiary can only claim the benefits after the demise of the account holder.
8. Transfer Facility – POMIS accounts can be freely transferred from one Post Office to another.
9. Post Office Monthly Income Scheme Bonus –Accounts opened earlier were eligible for a 5% bonus on deposit amount.
10. Taxability – This scheme doesn’t come under Section 80C of the Income Tax and it is subject to taxation. Moreover, it has no TDS either.

Additional Benefits of the Post Office Monthly Income Scheme

1. Cheque Opening Convenience: If you use a cheque to open your account, the date when the cheque is processed will be considered as the account opening date.
2. Equal Share in Joint Accounts: In a joint account, each person involved will have an equal share.
3. No Limit on Number of Accounts: You can have as many Post Office Monthly Income Scheme (POMIS) accounts as you want, either individually or jointly. However, there is a maximum cumulative balance criterion.
4. For Minors: Kids who are 10 years or older can have their own Post Office Monthly Income Scheme Account. Once they turn 18, they will be asked to convert their minor account into an adult account.
5. Convenient Crediting: The Post Office directly deposits the returns into the investor’s post office savings account every month using an Electronic Clearing Service (ECS) or Core Banking Solution (CBS).
6. Extended Interest Earning Period: Even after your POMIS account matures, if you don’t withdraw your money immediately, it will continue to earn interest for up to 2 years. The interest rate during this period will be the same as that of a regular Post Office savings account.

How To Open Post Office MIS Account?

1. Go to your nearby Post Office and ask for a form to join POMIS.
2. Fill in all the needed information on the form.
3. Give the filled form, along with photocopies of your ID and address proofs, and 2 small photos, to the Post Office. Remember to bring the original documents for checking.
4. If required, get the signatures of a witness or nominee on the form.
5. Put in your starting money using cash or a cheque. If you use a post-dated cheque, remember that the date on it is when your account officially starts.
6. After they finish processing everything, the Post Office worker will tell you all about your new POMIS account.

Positive Takeaway

The Post Office Monthly Income Scheme is a simple and secure way to generate regular income, making it an attractive choice for investors looking for stability in their financial portfolios.