The Post Office Monthly Income Scheme (POMIS) is a government-backed savings scheme designed to provide a fixed monthly income to investors. It is a low-risk investment option, making it an excellent choice for retirees, conservative investors, and those seeking stable returns. With a guaranteed 7.4% interest rate (as of April 2023), POMIS ensures capital safety and regular payouts, making it one of the most trusted savings schemes in India.
POMIS Interest Rates
| Feature | Details |
|---|---|
| Interest Rate | 7.4% per annum (credited monthly) |
| Minimum Investment | ₹1,000 |
| Maximum Investment | ₹9 lakh (individual) / ₹15 lakh (joint) |
| Tenure | 5 years |
| Eligibility | Indian residents (individuals & minors aged 10+) |
| Taxation | Interest is taxable, but no TDS |
| Premature Withdrawal | Allowed after 1 year with penalties |
| Official Website | India Post |
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What is the Post Office Monthly Income Scheme (POMIS Interest Rates )?
The Post Office Monthly Income Scheme (POMIS) is a fixed-income savings scheme offered by the Indian Post Office. The scheme guarantees regular monthly payouts based on the interest earned on the deposited amount. Since POMIS is backed by the Government of India, it is one of the safest investment options available for risk-averse investors.
Why Choose POMIS?
- Guaranteed Monthly Income – Provides a steady stream of income.
- Zero Risk of Capital Loss – Your principal amount remains safe.
- Better Returns than Savings Accounts – Earn higher interest compared to regular savings accounts.
- No Market-Linked Risks – Unlike stocks or mutual funds, POMIS does not fluctuate.
How Does POMIS Interest Rates Work?
POMIS works in a straightforward way:
- Deposit Money: Open a POMIS account at any post office by depositing a minimum of ₹1,000.
- Earn Monthly Interest: The interest (7.4% per annum) is credited monthly to your account.
- Withdraw or Reinvest: After 5 years, withdraw the principal amount or reinvest in POMIS or other schemes.
Example Calculation:
- If you invest ₹5 lakh, the monthly interest will be: (₹5,00,000×7.4%)÷12=₹3,083permonth(₹5,00,000 \times 7.4\%) ÷ 12 = ₹3,083 per month
- For ₹9 lakh (maximum limit for individuals), you get ₹5,550 per month.
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POMIS Interest Rate & Earnings Potential
The interest rate for POMIS is 7.4% per annum (as of 2023). Below is a breakdown of expected earnings:
| Investment | Monthly Interest | Annual Interest | Total Return (After 5 Years) |
|---|---|---|---|
| ₹1,00,000 | ₹617 | ₹7,400 | ₹1,37,000 |
| ₹3,00,000 | ₹1,850 | ₹22,200 | ₹4,11,000 |
| ₹5,00,000 | ₹3,083 | ₹37,000 | ₹6,85,000 |
| ₹9,00,000 | ₹5,550 | ₹66,600 | ₹12,33,000 |
Note: The principal amount is returned in full after 5 years.
POMIS Interest Rates : Eligibility & Account Opening Process
Who Can Open a POMIS Account?
- Indian residents (individuals only)
- Minors aged 10+ (with a guardian’s supervision)
- HUFs (Hindu Undivided Families) and NRIs are NOT eligible
Steps to Open a POMIS Account
- Visit the Nearest Post Office – Choose a convenient branch.
- Fill the Application Form – Obtain the POMIS form from the post office.
- Submit KYC Documents:
- Aadhaar Card
- PAN Card
- Passport-size photographs
- Address proof (electricity bill, voter ID, etc.)
- Deposit the Money – Minimum ₹1,000, up to ₹9 lakh (individual) or ₹15 lakh (joint).
- Nominate a Beneficiary – Add a nominee to receive the funds in case of an unforeseen event.
Once the account is set up, interest starts accumulating immediately.
POMIS Interest Rates: Premature Withdrawal Rules
Though POMIS has a 5-year lock-in period, you can withdraw early under these conditions:
- Before 1 year: No withdrawals allowed.
- Between 1 to 3 years: 2% penalty on the principal.
- Between 3 to 5 years: 1% penalty on the principal.
Example:
If you invested ₹5 lakh and withdrew in 2 years, the penalty would be: ₹5,00,000−(2%×₹5,00,000)=₹4,90,000₹5,00,000 – (2\% \times ₹5,00,000) = ₹4,90,000
So, you will receive ₹4,90,000 + any earned interest.
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POMIS Interest Rates: Tax Implications of POMIS
- Interest earned is taxable under the investor’s income tax slab.
- No TDS (Tax Deducted at Source) is deducted from the interest.
- No tax benefits under Section 80C of the Income Tax Act.
Tip: You can reinvest POMIS earnings into tax-saving instruments like PPF or ELSS mutual funds.
Advantages & Disadvantages of POMIS Interest Rates
Pros
- Guaranteed monthly income
- Government-backed security
- Higher interest than savings accounts
- No market risk
Cons
- Interest is taxable
- No compounding benefits
- Premature withdrawal penalty
POMIS Interest Rates: Alternative Investment Options
If you are looking for similar low-risk investments, consider:
| Investment | Interest Rate | Lock-in Period | Best For |
|---|---|---|---|
| POMIS | 7.4% | 5 years | Fixed monthly income |
| Senior Citizens Savings Scheme (SCSS) | 8.2% | 5 years | Retirees aged 60+ |
| Fixed Deposits (FDs) | 6-7% | 5-10 years | Safe savings |
| Public Provident Fund (PPF) | 7.1% | 15 years | Long-term tax-saving |
| Recurring Deposits (RDs) | 5.8-6.5% | 1-10 years | Monthly savers |
Each option has unique benefits, so choose based on your financial goals.
POMIS Interest Rates (FAQs)
Can I open multiple POMIS accounts?
Yes, but the total investment should not exceed ₹9 lakh (individuals) or ₹15 lakh (joint accounts).
How do I withdraw the monthly interest?
You can link your post office savings account or opt for auto-credit to a bank account.
What happens after 5 years?
You can withdraw the full amount or reinvest in a fresh POMIS account.
Can NRIs invest in POMIS?
No, NRIs are not eligible for this scheme.
Is POMIS better than FD?
POMIS offers higher interest and monthly payouts, but FDs have more flexible tenures and compounding benefits.
