Post Office Monthly Income Scheme (POMIS) 2025

We are in an era where finding a secure investment is becoming more challenging with fluctuating interest rates and unpredictable market conditions. But, if you are somebody who is looking for a safe and hassle-free way of earning a steady monthly income, then the Post Office Monthly Income Scheme (POMIS) might be a perfect option for you!

In this article, let us find out what a Post Office Monthly Income Scheme (POMIS) is, its features and the documents required to open a POMIS account.

What is a Post Office Monthly Income Scheme?

A Post Office Monthly Income Scheme (POMIS) is a safe and secure investment option available in India, where the nation’s government provides a sovereign guarantee on steady monthly income returns. In this scheme, the post office pays its investors with interest every month, helping them receive regular payouts. It also provides a higher rate of returns as well as tax benefits to the investors. 

Features of Post Office Monthly Income Scheme

The POMIS is a low-risk Monthly Interest Scheme (MIS) that generates a steady income for its investors. Let us look at the main characteristics of this beneficial scheme.

• Maturity period: The Indian Post Office Monthly Income Scheme has a minimum 5-year duration. 

• Interest: The POMIS currently provides an interest rate of 7.4%. 

• Number of holders: Post office MIS can be held by a minimum of one person and a maximum of three. 

• Nomination: Following the investor's passing, only the nominee will be eligible for all program advantages. After creating an account, the nominee might be assigned later.

• Transfer: People can move their MIS accounts from one post office in India to another.. 

• Taxability: No income received under this plan is subject to tax deductions or TDS. There is no tax benefit under the post office monthly income scheme.

Benefits of the Post Office Monthly Income Scheme 

Monthly Returns: 

The primary benefit of a Post Office Monthly Income Scheme is the guaranteed monthly returns, which helps in financial planning. Every month, the investor will get a fixed amount of interest based on their investment in the POMIS scheme, unlike the Post Office Recurring Deposit scheme, which gives away the interest at the time of maturity. 

Low risk: 

The second most significant benefit of investing in a POMIS is the benefit of not being affected by fluctuations in market conditions. Even if the market goes negative, the government sovereign will assure to pay interest to the investors, and your money is safe until maturity. 

Nomination Facility:

The nomination facility in POMIS gives the investor the right to nominate an individual as their nominee, which provides financial security to their dependents in case of their untimely demise. 

POMIS also gives the benefit of having more than 1 nominee per POMIS scheme where an investment can be divided among multiple nominees in the investor’s desired proportions. 

Accessibility:

The Post Office Monthly Income Scheme is available nationwide across India, even in the most remote areas. People who lack access to banks or other financial institutions can make use of this Post Office scheme at the convenience of their place. 

Rules of Post Office Monthly Income Scheme

Eligibility:

• Only an Indian resident can have a POMIS account. 

• Any adult (above 18+ years) can enjoy the benefits of this scheme by having a POMIS account. 

• A minor/person with an unsound mind can have an account when managed by their guardian. 

Interest:

• The interest will be paid after the completion of a month from the date of opening and the same till maturity. 

• The account holder does not receive any additional interest on the unclaimed interest that has been earned.

Account Opening:

• An individual can open an account with a maximum limit of Rs. 9,00,000, requiring a minimal initial deposit of Rs. 1,000 or in multiples of Rs. 1,000.

• An individual can open a joint account of maximum Rs.15,00,000 with up to three adults (18+ years), i.e., a maximum of 3 people per joint account. 

Premature withdrawals: 

• Your deposit cannot be withdrawn before the end of the first year. 

• A 2% deduction from the principal will be applied if you close your account after 1 year but before 3 years.

• A 1% deduction from the principal will be applied if you close your account after 3 years but before 5 years. 

Maturity:

• A POMIS account can be closed after maturity (5 years) by submitting an application form for the same along with your passbook at the post office. 

• In case the investor dies before maturity (5 years), the principal amount will be paid to their respective nominee. 

• MIS accounts opened on or after 8th December 2007 and up until 30th November 2011 are qualified for a bonus of 5% on the principal amount upon maturity. (Bonuses are not paid for deposits made on or after 1st December 2011).

Eligibility Criteria for a Post Office Monthly Income Scheme

Nationality: 

Only the residents of India can open a Post Office MIS account. This means that they need to satisfy at least one basic condition of the residential status. The two basic conditions are:

• An individual must be present in India for a period of 182 days or more in the tax year

• An individual must be physically present in India for a period of 60 days or more during the relevant tax year, and 365 days or more in aggregate in the four preceding tax years.

Minor/ Person of Unsound Mind:

A guardian on behalf of a minor above the age of 10 or a person of unsound mind can open a Post Office MIS. 

• In India, a minor is a person who is under 18 years of age. 

• A person with an unsound mind is somebody who is suffering from a mental illness that prevents them from making any rational decisions, like managing their finances. 

Joint Account:

Individuals can open a joint account with up to three adults (above 18 years) and have Joint A and Joint B. 

• Joint A: Here, all the account holders have a shared right to the money. Practically speaking, all the joint holders are required to act together when a transaction must take place. 

• Joint B: This joint account is run on an ‘either or survivor’ basis. The money is paid to one or both of the account holders, or in the event that one holder passes away, to the survivor(s). This implies that any joint holder can manage the account-related tasks on their own without the signatures of the other holders. 

Documents Required to Open a Post Office Monthly Income Scheme

In order to open a Post Office Monthly Income Scheme(POMIS) account, you need to submit the following documents.

Passport Size Photographs:

2 recent passport-size photographs are to be given. In case of a joint account, photographs of all the joint holders should be given. 

Identity Proof:

You are supposed to submit a copy of any government-issued identity proof like an electoral photo identity card, ration card with a photograph, passport, driving license, POSB identity card or any proofs similar to these.

In case of a joint account, the identity proof of all the depositors is mandatory. 

Address Proof:

You are supposed to submit a copy of any government-issued ID for address proof like a bank or post office passbook/statement with your current address, a passport with your current address, a ration card with your current address, a salary slip of a reputed employer with your current address, a UIDAI letter containing current address. You can also submit an electricity bill or telephone bill that is not more than 3 months old.

In case of a joint account, the address proof of all the depositors is required. 

POMIS Application Form: 

A completely filled Post Office Monthly Income Scheme application form must be put forward to the post office, along with the details of all the depositors (if it is a joint account). The form must also have the necessary signatures filled in, like witnesses' and beneficiaries' signatures. 

Initial Deposit: 

An initial deposit has to be made, and that can be done via cheque or cash. If the deposit is made through a cheque, then the date on the cheque will be considered the account opening date.

How to Open a Post Office Monthly Income Scheme?

• Step 1: Go visit your nearest post office and get a Post Office Monthly Income Scheme account opening form. You can also download the same through the India Post website. 

• Step 2: Open a Post Office Savings Account if you do not have one already. 

• Step 3: Fill in the necessary details in your POMIS account application form with accurate information.

• Step 4: Submit the duly filled application form along with the documents mandated, like photographs, identity proof, and address proof, along with the signatures of your witnesses and beneficiaries. Also, remember to carry all your original documents for verification purposes.

  In case of illiterate depositors, the documents needs to be attested by any of the Gazetted Officer, or Sarpanch Gram Panchayat, or any Postal Staff, or Gramin Dak Sewak. 

  In case the account is opened through an agent, the respective agent should attest to the documents by putting dated signatures along with their agency number in addition to self-attestation. 

• Step 5: You are now required to make an initial deposit through cash or cheque. If the deposit is made through a cheque, then the date that is mentioned on the provided cheque will be considered the date of opening of the account. 

How to Withdraw/Close a Post Office Monthly Income Scheme?

After Maturity: 

If an account holder wants to close their Post Office Monthly Income Scheme account after maturity (5 years), then they have to submit a prescribed application form along with their passbook at the concerned post office.

Before Maturity: 

If an account holder wants to withdraw from their Post Office Monthly Income Scheme before maturity (5 years), then they will attract a few penalties according to the date of withdrawal and depending on how long the POMIS account has been opened.

Note: Before the completion of one year from the date of deposit, no POMIS account shall be allowed to withdraw.

Taxation on POMIS Income

Section 80C: 

This deduction under the Income Tax Act 1961 covers Life Insurance Premium, Public Provident Fund, Employees Provident Fund, Equity Linked Savings Scheme, Unit Linked Insurance Plan, Tax Saver Fixed Deposits, National Pension Scheme, and Home Loan Principal Repayment.

This means that the Post Office Monthly Income Scheme does not attract any tax benefits under Section 80C. This means that this scheme provides zero tax benefits to its depositors. 

Tax Deducted at Source: 

There is no tax deducted at the source on the interest earned from the Post Office Monthly Income Scheme. 

Income Tax Slab Rates: 

Though TDS is not deducted, the interest earned here will be taxed according to the investor’s income slab rates. If they earn below the limited threshold, then the interest earned from the POMIS account will not be taxed at all. 

How to Maximise Returns from Post Office Monthly Income Scheme?

A POMIS account holder can reinvest their monthly interest payments into a Recurring Deposit (RD) account in order to earn additional interest on the accumulated income instead of withdrawing the monthly interest.

This can be done by choosing the option of auto-transferring your monthly interest income from your Post Office Savings Bank Account to your Post Office Recurring Deposit Account. 

Post Office Monthly Income Scheme for Senior Citizens

A senior citizen can also open a POMIS account, but it does not provide any additional benefits. Rather, they can open Senior Citizens Savings Scheme (SCSS) accounts.

Under the Senior Citizens Savings Scheme (SCSS), a. 8.2% interest rate is payable on quarterly basis. This scheme demands a minimum amount of Rs.1,000 or its multiples for opening an account which cannot exceed a maximum investment of Rs.30 lakh.

Any individual who is above 60 years of age, or any individual who is a retired civilian employee above 55 years of age, or any individual who is a retired defense employee who is above 50 years of age can open this SCSS account for themselves. 

If a senior citizen wants steady fixed monthly income but with just 7.4% interest returns, then choosing the Post Office MIS would be a good option. But if they are okay with receiving quarterly income with more interest rate i.e., 8.2%, then the senior citizens can choose SCSS. 

Conclusion

The Post Office Monthly Income Scheme is one of India’s most stable and trusted investment options for conservative investors. With an attractive interest rate of 7.4% currently, it pulls the risk-averse individuals to invest their money into this scheme. It provides financial security through capital preservation and guaranteed returns where any Indian resident above the age of 18 years can open a POMIS account. 

With the trust of India Post and government-backed security, no TDS deductions, reinvestment options, and withdrawals, POMIS has gained popularity as well as a good amount of account holders in this scheme.

Whether you are a retiree searching for financial stability or an investor looking for risk-free returns, this monthly income scheme from the post office would be an ideal choice for you!

FAQs

Q. Is POMIS a good investment?

Yes, absolutely! Post Office Monthly Income Scheme can be considered to be a good investment option for individuals who want to have low-risk, steady, and fixed monthly income. This would be a great option for conservative investors, senior citizens, and retirees.

Q. What is the disadvantage of the Post Office MIS?

A Post Office Monthly Income Scheme’s primary disadvantage is its lack of liquidity. This means that the depositor has to incur penalties if they want to withdraw their account before maturity. Adding on to these, getting low returns relative to the inflation rate, a limited cap on the investment amount, and zero tax benefits are some of the demerits of having a POMIS account.

Q. Which is better? MIS or FD?

A Post Office MIS is providing an interest rate of 7.4% per annum currently, whereas a Fixed Deposit (FD) has varying interest rates in different banks, usually ranging from 6% to 8% per annum. So, choosing the right option depends on which bank you are planning to open an FD account in.

Q. Can I have multiple POMIS accounts?

Yes! You can have multiple monthly income schemes in post office accounts, provided that the total deposit amount cannot exceed the maximum limit of Rs.9,00,000 and Rs.15,00,000 for single and joint account, respectively.

Q. Can I open a joint POMIS account?

Yes! You can open a joint account in the Post Office Monthly Income Scheme with up to three adults. Also, keep in mind that all joint account holders have equal rights to the funds in the account.

Q. Can I reinvest the maturity amount in POMIS again?

Yes! The Post Office Monthly Income Scheme gives you the flexibility to either withdraw your amount upon maturity or reinvest the amount again in a new POMIS account.

Q. Is there a lock-in period for Post Office MIS?

Yes, the monthly income scheme in the post office has a lock-in period of 5 years. This means that an individual cannot withdraw their invested amount before the completion of the maturity period without penalty. However, they can withdraw the amount after one year with a deduction on the principal amount.