Post Office Monthly Income Scheme (POMIS) 2021 | Interest Rate, Eligibility, Benefits, FAQ

The Post Office Monthly Income Scheme i.e., POMIS is a small savings scheme backed by the Indian government that allows investors to set aside (save) a specified sum each month. Following that, interest is calculated at the applicable rate and paid to the depositor(s) every month.  The Post Office, like any other state bank, has always been a safe place for money deposits and transactions. This is particularly true for elderly people. Branches of the Post Office across the country offer a variety of savings plans. One such scheme is the Post Office Monthly Income Scheme, which allows you to invest a set amount and get a monthly fixed interest payment.

Post Office Monthly Income Scheme

Post Office Monthly Income Scheme (POMIS) 2021

POMIS is one of a variety of banking services offered by the Post Office, which is regulated by the Finance Ministry. As a result, it is quite efficient. It’s a low-risk MIS that pays out consistently. The interest rate is 6.6 percent per annum, payable monthly, for the quarter ending September 30, 2021. The investment duration is 5 years, and you can invest up to Rs.4.5 lakh individually or Rs. 9 lakhs combined. Its major goal is to safeguard assets

Mr. Kapil, for example, has put Rs.4.5 lakh into the post office’s 5-year monthly investment scheme. As previously stated, the interest rate is 6.6 percent per annum. For that period, his monthly salary will be Rs.2,475 rupees. He can withdraw his Rs.4.5 lakh deposit from any post office or have it transferred to his savings account using Electronic Clearance Service after it matures. Otherwise, he can renew his account.

Who Should Consider Investing in POMIS?

POMIS appeals to risk-averse investors because of its flexibility and reliability, although with minimal tax benefits. If you believe you fall into this category, now is the time to begin one.

Post Office Monthly Income Scheme Eligibility

The eligibility criteria to open a POMIS account is as follows:

  • Anyone above the age of 18 can create an account.
  • A POMIS account can only be opened by a resident of Indian.
  • NRIs are not eligible for this scheme’s advantages.
  • You can open an account on behalf of a kid if he or she is over the age of ten. When kids reach the age of 18, they can apply for the fund.
  • After reaching the majority, a minor must apply for the account to be converted into his name.

National Savings Certificate Scheme

Post Office Monthly Income Scheme Benefits

Some of the important Benefits& Features of Post Office Monthly Income Scheme are as follows:

  1. Duration: The Post Office MIS has a five-year lock-in period. When the program matures, you can either withdraw or reinvest the money you deposited.
  2. Low-risk investment: Because you invested in a fixed income plan, your money is safe and not exposed to market dangers.
  3. Affordably priced deposits: You can begin with a Rs.1,000 first investment. You can invest in different amounts depending on your financial situation.
  4. Capital protection: Because this is a government-backed scheme, your money will be protected until maturity.
  5. Ownership of several accounts: You have the option of opening many accounts in your name. However, the total deposit amount in all of them cannot exceed Rs.4.5 lakh.
  6. Guaranteed returns: Every month, you will receive money in the form of interest. Although the returns do not beat inflation, they are greater than other fixed-income assets such as FDs.
  7. Nominee: If the investor dies during the account’s term, the investor can name a beneficiary i.e., any of the family members to receive the benefits and corpus.
  8. Tax efficiency: Section 80C does not apply to your investment, and TDS is also not relevant.
  9. Payment: You will receive your payout one month after making your first investment, rather than at the start of each month.
  10. Joint account: You can open a joint account with two or three persons. This account can hold an aggregate amount of up to Rs.9 lakh in this situation.
  11. Reinvestment: To continue earning advantages, you can reinvest the corpus when it matures in the same program for another block of five years.
  12. Fund transfer: The investor can transfer funds to a recurring deposit (RD) account, which is a new function offered by Post Office.
  13. Money or interest transaction ease: You can either collect your monthly interest from the post office or have it automatically sent to your savings account. Reinvesting the interest in a SIP can also be profitable.

Maximum Deposit Amount Allowed

  • For a single account, the maximum deposit amount will be Rs. 4.5 lakh.
  • For Joint Account i.e., a combined account with two or three adult persons the maximum deposit amount will be Rs. 9 lakhs.

Required Documents for POMIS

To open a Post Office Monthly Income Scheme i.e., POMIS Account, the applicant must have the following documents:

  • Applicants any government-issued Identity Proof like a copy of Passport, Driving License, Voter ID card, Aadhaar, etc.
  • Users’ recent passport size photograph.
  • Any Address Proof like on government-issued ID or recent utility bills.

PPF Account Scheme

How to Open POMIS Account

The procedure to open a Post Office Monthly Income Scheme account is as follows:

  • First of all, if you haven’t already opened a post office savings account, then open up a post office savings account.
  • Then pick up an application form for POMIS at your local post office.
  • At the Post Office, submit the completed form, along with a photocopy of your ID and residential verification, as well as two passport-size pictures. Carry the originals with you just in case.
  • On the form, get the signatures of your nominee(s) or witness.
  • Make your first deposit with cash or a check. The date on the cheque will be the account opening date in the case of a post-dated cheque.
  • The executive at the Post Office will supply you with the details of your newly openaccount once the processing is complete.

Analyzing POMIS with Other Monthly Income Plans

When analyzing Post Office MIS to other Monthly Income Plans, there are a few things to keep in mind.

POMISMonthly Income Mutual FundMonthly Income Insurance
Guaranteed income at a rate of 6.6 percent every yearThere is no certainty of income because it is invested in a 20:80 equity-to-debt ratio.Annuities paid every month (rates vary based on premiums & period)
a specified rate of returnFloating rate based on market conditionsNA
No TDSTDS appliedAnnuity is taxed
Withdrawal is allowed after 12 months, although there is a penalty.If you withdraw before the deadline, you will be charged an exit load.Because this is a long-term investment, there are higher surrender charges.
Low-risk, thus it’s good for risk-averse people.Appropriate for persons who have a high-risk appetite.Investing and insuring at the same time has two advantages.
A per-account limit of Rs. 4.5 lakhs and a joint account limit of Rs. 9 lakhsNo investment limitNo investment limit

EPF Withdrawal 

Early Withdrawal’s Consequences

Some of the early withdrawal consequences are given in the table below:

Time of POMIS WithdrawalOutcomes of Premature Withdrawal
Before completing one yearZero benefits
Between 1st and 3rd yearAfter deducting a 2% penalty, the entire deposit is refunded.
Between 3rd and 5th yearWith a 1% penalty, the entire corpus is refunded.

FAQ’s

Is this program appropriate for senior citizens?

Yes. For senior citizens, this is a beneficial arrangement because they can put their life savings in the account and collect interest on their monthly costs.
How do you calculate the individual amounts in the case of sharing account?
In each joint account, each joint account holder will have an equal portion.

What happens to my account if I have to relocate due to a job assignment?

If you move from one city to another, you can easily transfer your POMIS account to the current city’s Post Office at no additional expense.

What if the user doesn’t want to take his/her deposit money out when the account matures?

If the user does not withdraw the deposit amount before the account’s maturity date, the money will remain in the account and collect simple interest in accordance with the Post Office Savings Account for two years following the account’s maturity date.

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