Post Office Monthly Income Scheme (POMIS): Interest Rate, Eligibility & Tax Rules
A practical guide to the Post Office Monthly Income Scheme for investors seeking stable monthly income.
7.40% p.a.*
5 Years
Fixed Interest Payout
Government Backed
What is the Post Office Monthly Income Scheme?
The Post Office Monthly Income Scheme (POMIS) is a Government-backed small savings scheme designed for investors who prefer regular monthly income instead of market-linked returns. Under this scheme, a lump sum amount is deposited once, while interest is credited every month throughout the five-year tenure. Since the investment is supported by the Government of India, it is considered suitable for individuals looking for capital protection and predictable returns.
Key Features
- Government-backed investment.
- Current interest rate: 7.40% per annum (subject to Government notification).
- Five-year maturity period.
- Minimum investment starts from ₹1,000.
- Maximum investment: ₹9 lakh (Single) and ₹15 lakh (Joint).
- Interest is credited every month.
- Single as well as joint accounts are permitted.
Who Can Open a POMIS Account?
Resident Indian adults can open a POMIS account individually or jointly. Minors may also invest through their legal guardian. However, Non-Resident Indians (NRIs) are presently not eligible to invest under this scheme.
Tax Treatment
Unlike certain tax-saving investments, deposits made under POMIS do not qualify for deduction under Section 80C of the Income-tax Act. Furthermore, the monthly interest received is fully taxable according to the investor's applicable income tax slab. Therefore, investors should consider the post-tax return while evaluating this scheme.
Advantages of POMIS
- Regular and predictable monthly income.
- Low investment risk due to Government backing.
- Simple account opening process.
- Facility for nomination and transfer between post offices.
- Suitable for retirees and conservative investors.
Premature Withdrawal
| Withdrawal Period | Applicable Rule |
|---|---|
| Before 1 Year | Not permitted |
| 1–3 Years | 2% deduction on principal |
| 3–5 Years | 1% deduction on principal |
Is POMIS Worth Investing?
POMIS can be an attractive option for investors who prioritise stability over high returns. While the scheme may not generate wealth like equity investments over the long term, it offers dependable monthly income with comparatively low risk. Retirees, pensioners and individuals seeking steady cash flow often consider it as part of a diversified investment portfolio.
Post Office Monthly Income Scheme (POMIS): Interest Rate, Eligibility & Tax Rules
A practical guide to the Post Office Monthly Income Scheme for investors seeking stable monthly income.
7.40% p.a.*
5 Years
Fixed Interest Payout
Government Backed
What is the Post Office Monthly Income Scheme?
The Post Office Monthly Income Scheme (POMIS) is a Government-backed small savings scheme designed for investors who prefer regular monthly income instead of market-linked returns. Under this scheme, a lump sum amount is deposited once, while interest is credited every month throughout the five-year tenure. Since the investment is supported by the Government of India, it is considered suitable for individuals looking for capital protection and predictable returns.
Key Features
- Government-backed investment.
- Current interest rate: 7.40% per annum (subject to Government notification).
- Five-year maturity period.
- Minimum investment starts from ₹1,000.
- Maximum investment: ₹9 lakh (Single) and ₹15 lakh (Joint).
- Interest is credited every month.
- Single as well as joint accounts are permitted.
Who Can Open a POMIS Account?
Resident Indian adults can open a POMIS account individually or jointly. Minors may also invest through their legal guardian. However, Non-Resident Indians (NRIs) are presently not eligible to invest under this scheme.
Tax Treatment
Unlike certain tax-saving investments, deposits made under POMIS do not qualify for deduction under Section 80C of the Income-tax Act. Furthermore, the monthly interest received is fully taxable according to the investor's applicable income tax slab. Therefore, investors should consider the post-tax return while evaluating this scheme.
Advantages of POMIS
- Regular and predictable monthly income.
- Low investment risk due to Government backing.
- Simple account opening process.
- Facility for nomination and transfer between post offices.
- Suitable for retirees and conservative investors.
Premature Withdrawal
| Withdrawal Period | Applicable Rule |
|---|---|
| Before 1 Year | Not permitted |
| 1–3 Years | 2% deduction on principal |
| 3–5 Years | 1% deduction on principal |
Is POMIS Worth Investing?
POMIS can be an attractive option for investors who prioritise stability over high returns. While the scheme may not generate wealth like equity investments over the long term, it offers dependable monthly income with comparatively low risk. Retirees, pensioners and individuals seeking steady cash flow often consider it as part of a diversified investment portfolio.