Post office depository service has a wide assortment of schemes that offer fixed returns on investment. These schemes are all stringed with the benefit of the sovereign guarantee, i.e. this investment avenue is government-backed. Therefore, these schemes are safer investment options compared to equity shares and many fixed-income options.
Post Office Monthly Income Scheme, amongst others such as Post Office Savings Account, Post Office Recurring Deposit, Post Office Time Deposit, is one of the highest-earning schemes with an interest rate of 7.4%. The interest in this scheme, as the name suggests, is disbursed monthly. This scheme, like other post office schemes, is recognized and validated by The Ministry of Finance.
The following table demonstrates the maximum investment limit for the Post Office Monthly Income Scheme.
|Account Type||Maximum Limit|
|Single Account||Rs. 9 Lakhs|
|Joint Account||Rs. 15 Lakhs|
|Minor Account||Rs. 3 Lakhs|
The Post Office Monthly Income Scheme's rate of interest is fixed by the Finance Ministry and the Central Government of India. The interest rates are often revised every quarter depending on the returns generated by government bonds of similar tenure.
The following table includes the current and previous interest rates
Interest Rate on Post Office MIS (annual)
|1st April 2023 Onwards||7.40%|
|1st April 2022 – 30th June 2022||7.70%|
|1st January 2023 – 31st March 2023||7.10%|
|1st October 2022 – 31st December 2022||6.70%|
|1st July 2022 – 30th September 2022||6.60%|
|1st April 2022 – 30th June 2022||6.60%|
|1st April 2021 – 31st December 2021||6.60%|
|1st April 2018 – 30th June 2018||7.30%|
|1st January 2018 – 31st March 2018||7.30%|
|1st October 2017 – 31st December 2017||7.50%|
|1st July 2017 – 30th September 2017||7.50%|
|1st April 2017 – 30th June 2017||7.60%|
Opening a Post Office Monthly Income Scheme Account (MIS) is easy and hassle-free. However, to invest in the scheme, you need to have a Post Office Savings Account. After opening a savings account with the Post Office – if you did not already have one – you can adhere to the following procedure –
You can invest the capital amount through a dated cheque. The date mentioned on the cheque will be considered as the account opening date. The interest earned on the investment will be disbursed one month from the opening date.
The beneficiary can also be nominated after opening the Post Office Monthly Income Scheme in India account.
1) Before the completion of one year = Zero benefits
2) From 1 year to 3 years = The entire deposit is refunded with a 2% penalty.
3) From the 4th year to the 5th year = The entire corpus is refunded with a 1% penalty.
There are two major benefits to investing in POMIS. As it is not a market-linked investment scheme and is guaranteed by the government, it is a go-to option for many investors with a low-risk appetite. These benefits are –
Hybrid funds, comprising both equity funds and fixed income instruments, are a viable option to engage in the stock market, develop a diverse investment portfolio, earn comparatively higher returns and take lower risk compared to equity shares and funds.
|Savings Scheme||Rate of Interest||TDS|
|Post Office Monthly Income Scheme||7.4%||No TDS is deducted|
|Post Office Recurring Deposit||6.2%||No TDS is deducted|
|Post Office Time Deposit (1,2,3 years)||5.5%||No TDS is deducted|
|Post Office Time Deposit (5 years)||6.7%||TDS is deducted|
|National Savings Certificate||6.8%||TDS is deducted|
|Senior Citizen Saving Scheme||8.2%||TDS is deducted|
|Public Provident Fund||7.10%||TDS is deducted|