Post Office Monthly Income Scheme - MIS Interest Rate 2024

Features and Benefits of the Post Office Monthly Income Scheme (POMIS)

The key features and benefits of the MIS (monthly income scheme) scheme are:

• Eligibility: The MIS Post Office Scheme is open to all Indian citizens, excluding NRIs.

• Investment Amount: Any amount in multiples of Rs. 100 is accepted under the MIS scheme. 

• Minor Account: A Post Office Monthly Income Scheme account can be opened for children above 10 years, with withdrawals permitted after maturation at 18 years.

• Lock-in Period: The invested amount is locked in for a minimum of 5 years under the monthly income scheme.

• Maximum Limit: Individuals can invest up to Rs. 9 Lakhs, with a minimum investment of Rs. 1,500. Joint accounts have a maximum limit of Rs. 15 Lakhs.

• Transferable: You can transfer your Post Office Monthly Income Scheme account to a more convenient post office if you relocate within India.

• Joint Account: Up to 3 individuals can jointly open an account, each with equal rights. The maximum limit for joint accounts is Rs. 15 Lakhs under the MIS scheme.

• Transfer of Funds: Investors have the option to shift their funds to a recurring deposit (RD) account, a recent addition to the features offered under the MIS Post Office Scheme. 

• Nomination: Investors have the opportunity to designate a beneficiary, usually a family member, allowing them to claim the benefits and corpus in the event of the investor's demise during the account's tenure.

• Auto-Withdrawal: Monthly interest can be withdrawn automatically through PDCs or ECS, especially if the account is with a CBS Post Office.

• Convenience in handling money/interest: You have the option to receive the monthly interest either in person from the post office or have it automatically transferred to your savings account. Additionally, investing the interest in a Systematic Investment Plan (SIP) presents an attractive opportunity under the Post Office Monthly Income Scheme.

• Reinvestment: After maturity, you can reinvest the principal amount in the same scheme for another 5-year term to sustain earning advantages.

• Penalty: Early withdrawal before the 5-year lock-in period incurs a penalty.

• Tax Benefits: While the interest is not subject to TDS, it doesn't qualify for tax benefits under Section 80C.

• Investment Limits:

  • Single Account: Rs 9,00,000

  • Joint Account: Rs 15,00,000

  • Minor Account: As stated at the time of account opening

• High & Guaranteed Returns: Earn a healthy 7.4% interest annually under the MIS Post Office Scheme, one of the highest among government schemes. It's risk-free, backed by the Indian government.

• Steady Monthly Income: Receive guaranteed monthly payments, providing a predictable income stream for your needs.

• Reinvestment Option: You have the option to reinvest the earned interest in high-return securities like equity shares or equity funds; however, these investment alternatives come with significantly greater levels of risk.

Comparison Between

Fixed Deposits, Guaranteed Return Plans & Debt Mutual Fund

Guaranteed Return Plans, Fixed Deposits &
Debt Mutual Fund

Guaranteed Return Plans

Returns Before Tax

7.5% ^(TAX-FREE)

Returns After Tax

7.5%

Guaranteed Returns

Yes

Life Cover

Yes

Tax on Profit

Tax Free*

Risk

No Risk

Still Better than FD’s and Debt Mutual Fund

Fixed Deposits

Returns Before Tax

7% ^(TAXABLE)

Returns After Tax

4.8%

Guaranteed Returns

Yes

Life Cover

No

Tax on Profit

Taxable

Risk

Low Risk

Debt Mutual Fund

Returns Before Tax

8% ^(TAXABLE)

Returns After Tax

5.5%

Guaranteed Returns

No

Life Cover

No

Tax on Profit

Taxable

Risk

High Risk

VIEW PLANS

*For annual premium upto ₹5 Lacs

What is the Eligibility Criteria for the Post Office Monthly Income Scheme?

To invest in the Post Office Monthly Income Scheme, you must meet the following eligibility criteria:

• A single adult

• Joint Account (up to 3 adults)

• Guardian on behalf of a minor/person of unsound mind

• Minor above 10 years of age in their name

• The monthly income scheme is not available for NRIs

How Can You Open a Post Office Monthly Income Scheme Account?

Investing in a Post Office Monthly Income Scheme (MIS scheme) is quick and easy. You can open a Monthly Income Scheme savings account at your nearest Post Office branch. Follow the below-mentioned steps to open the account: 

• If you don't have a post office savings account, start by opening one.

• Visit your nearest Post Office and request a POMIS application form.

• Complete the application form and submit it along with a photocopy of your ID, residential proofs, and two passport-size photos at the Post Office. Don't forget to bring the originals for verification.

• Ensure to obtain the signatures of your witness or nominee(s) on the form.

• Make the initial deposit using cash or cheque. If using a post-dated cheque, the date on the cheque will be considered as the account opening date.

• Once you've submitted all the required documents and made the initial deposit, the Post Office will process your application.

• After processing, the Post Office executive will provide you with the details of your newly opened MIS Post Office Scheme account.

Documents Required to Open an Account Under the Post Office Monthly Income Scheme (MIS Scheme) 

• Identity Proof: Government-issued ID (e.g., Passport, Voter ID, Driving License, Aadhaar).

• Address Proof: Government ID or recent utility bills.

• Photographs: Passport-size photos.

Post Office MIS Interest Rate

The interest rate for the Post Office Monthly Income Scheme in 2024 has undergone a significant reduction, dropping from 8.40% to 7.4% annually, payable on a monthly basis. As of now, the interest rate for the Post Office MIS interest rate 2024 stands at 7.4% per annum. This rate applies to the interest period spanning from April to June 2024 and is payable monthly.

Post Office Monthly Income Scheme Interest Rate 2024 and History

Below are the MIS Post Office Interest Rate 2024 and the Post Office Monthly Income Scheme Interest Rate before that:

Interest Rates as of April 2024

Early Withdrawal Penalty Rules for the Post Office Monthly Income Scheme

If you have to withdraw the money before 5 years under the Post Office MIS scheme, here’s what happens:

• No withdrawals are permitted in the first year.

• If closed between 1 to 3 years, a 2% penalty on the principal is imposed.

• If closed between 4 to 5 years, a 1% penalty on the principal is applied.

Post Office Monthly Income Scheme vs. Monthly Income Plans

People often need clarification on the MIS and the Monthly Income Plan. To make it worse the Monthly Income Plan itself is used both in the context of insurance and mutual funds. Here are the essential differences between the three:

Post Office Monthly Income Scheme vs Other Post Office Savings Schemes

Conclusion

The Post Office Monthly Income Scheme (MIS scheme) is a safe and secure investment option that offers substantial returns with a short lock-in period. The Monthly Income Scheme guarantees a fixed monthly income with an interest rate of 7.4% per annum. It is a perfect investment avenue for people who prefer debt investment with good returns.