Post Office Monthly income scheme

The post office monthly income schemes are safer investment options compared to equity shares and many other fixed-income options. They are government backed and offer fixed returns on investments, making them a popular option. The post office offers many options such as Post Office Savings Account, Post Office Recurring Deposit, Post Office Time Deposit, being one of the highest-earning schemes with an interest rate of 7.6%. The interest in this scheme is monthly.

How to open an account under this scheme?

Opening an account is completely. One must however need to have a Post Office Savings Account. The beneficiary can also be nominated after opening the POMIS account.

  • The following procedure is to be followed next.
  • Procure a POMIS Form from your nearest post office.
  • The form should be submitted along with – photocopy of ID proof, photocopy of address proof, 2 passport-sized photographs.
  • Submit the originals for the documents mentioned above for verification purposes.
  • Collate signatures of witnesses or beneficiaries.

Primary features

  1. A maximum amount of Rs.4.5 Lakh can be invested in this scheme. By holding different PMOIS in different post offices the limit shall still be Rs.4.5 Lakh.
  2. The amount deposited in such account cannot be withdrawn prior to 5 years.
  3. In case of joint accounts as well, the share of investment should be within this limit. The maximum limit for minor accounts is Rs.3 Lakh. The minimum investment amount is Rs.1,500 for any individual.
  4. While changing residential status to a different city anywhere in India, POMIS account is transferred to a convenient post office. The account will be carried forward to the post office of new location.
  5. A maximum of 3 individuals can open a joint account for this scheme giving them equal rights over it.The maximum limit in this case is Rs.9 Lakh, and singular limit is Rs.4.5 Lakh.
  1. A minor account can be opened by a parent in the name of a child. The age limit for minors is above 10 years. He/she can withdraw the amount after maturing to 18 years.
  2. Every Indian citizen is eligible to open except NRI individuals.
  3. The monthly interest amount can be withdrawn through automatic transfer to savings account through PDCs or ECS. If the POMIS account is with a CBS Post Office, then the interest amount can be directed towards any other CBS centric savings account.
  4. withdrawal of investment corpus before the lapse of the lock-in period, a penalty is charged on the withdrawal amount depending on the time of such redemption if it is made within the 1st and 3rd year, a 2% penalty is charged. And if within the 3rd and 5th year, a 1% penalty is charged.
  5. Any amount in the multiple of Rs.100 is admissible.
  6. The interest amount does not incur any TDS, however, it also does not attract any tax benefits under Section 80C.
  7. The capital amount is given with a dated cheque, which serves as the account opening date. The interest earned on this will be disbursed one month from the opening date.


It earns a steady flow of income every month on investment corpus irrespective of market fluctuations. An interest rate of 7.6% p.a. is fixed by the post office. The interest earned can be invested into high-profit yielding securities such as equity shares, equity fund.

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Krishna Rath is a SEBI Registered Investment Adviser, and since 2015 has been educating netizens on investments and insurance. Krishna is a fee only SEBI RIA and is Odisha's first SEBI RIA. With background in IT, Krishna is changing the advisory space with new innovations in AdvisoryTech.

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