If you are looking for a safe and rewarding investment option, the Post Office’s Fixed Deposit (FD) and Post Office Monthly Income Scheme (POMIS) could be your perfect choices. By investing just ₹2 lakh, you can earn a handsome return in 5 years, all while enjoying the safety of a government-backed savings plan.
Post Office’s Great Scheme
| Particulars | Post Office Fixed Deposit (5 Years) | Post Office Monthly Income Scheme (POMIS) |
|---|---|---|
| Investment Amount | ₹2,00,000 | ₹2,00,000 |
| Interest Rate | 7.5% per annum (compounded quarterly) | 7.4% per annum (paid monthly) |
| Maturity Amount | ₹2,90,659 (approx.) | ₹2,00,000 (principal) + ₹73,980 (total interest) |
| Monthly Income | Not applicable | ₹1,233 per month |
| Tax Benefit | Eligible under Section 80C | No tax deduction |
| Risk Level | Government-backed (very low risk) | Government-backed (very low risk) |
| Official Website | India Post Official Website |
Investing ₹2 lakh in the Post Office FD or Post Office Monthly Income Scheme is a smart, safe, and stable strategy for building wealth or ensuring regular income. If you are looking for a lump sum corpus after 5 years, go for the 5-year Fixed Deposit. If you prefer a steady monthly income, the Monthly Income Scheme will suit you better.
Understanding the Post Office Investment Options
What is a Post Office Fixed Deposit (FD)?
The Post Office Time Deposit (TD), commonly known as Post Office FD, is a government-supported savings scheme that offers fixed returns over a specified tenure. For a 5-year deposit, you currently earn an interest rate of 7.5% per annum, compounded quarterly.
Benefits:
- Guaranteed returns
- Eligible for tax benefits under Section 80C
- Safe and stable investment
Example:
If you invest ₹2,00,000 today in a 5-year Post Office FD, your maturity amount will be approximately ₹2,90,659. You earn ₹90,659 in 5 years without any market risk.
see also: These Banks Are Offering up to 9.1% Interest on 3-Year FDs
What is the Post Office Monthly Income Scheme (POMIS)?
The Post Office Monthly Income Scheme (POMIS) is ideal for people seeking a steady monthly income. It offers a 7.4% annual interest, paid every month, making it a favorite among senior citizens, retirees, and conservative investors.
Benefits:
- Regular monthly payouts
- Principal returned in full at maturity
- Extremely low-risk investment
Example:
For a ₹2 lakh investment, you will receive approximately ₹1,233 every month for 5 years, and after the term, you get your ₹2 lakh principal back.
Detailed Comparison: FD vs. POMIS
Interest Rate
- FD: Higher effective return due to quarterly compounding (7.5%)
- POMIS: Fixed 7.4% simple interest paid monthly
Returns
- FD: Lump sum payout at maturity
- POMIS: Steady monthly payouts plus principal at the end
Liquidity
- Both allow premature withdrawal after a certain lock-in period, but with penalties.
Taxation
- FD: Eligible for deduction under Section 80C up to ₹1.5 lakh
- POMIS: No deduction available; monthly income is taxable
Quick Tip:
If you are building wealth for the future (say for a child’s education or your own retirement corpus), a Post Office FD is more suitable. If you need immediate monthly income, go for POMIS.
Step-by-Step Guide: How to Invest ₹2 Lakh in Post Office Schemes
Step 1: Choose the Right Scheme
Decide between FD and POMIS based on your needs — lump sum or monthly income.
Step 2: Visit the Nearest Post Office
Carry these documents:
- Aadhaar Card
- PAN Card
- Passport-size photographs
- Address proof (utility bill, bank passbook)
Step 3: Fill the Application Form
You can collect the form from the post office or download it from the official website.
Step 4: Make the Deposit
Post Office Monthly Income Scheme 2025: Invest Once and Get a Fixed Monthly Pension of ₹20,000
Deposit the amount via cash, cheque, or bank transfer. Minimum investment starts from ₹1,000.
Step 5: Collect the Receipt/Passbook
This acts as proof of your investment and will be needed for maturity or withdrawal.
Why Choose Post Office Schemes?
Safety and Trust
These schemes are backed by the Government of India, ensuring maximum security for your hard-earned money.
Higher Interest Rates
Compared to many bank savings accounts and FDs, Post Office interest rates are higher, especially for 5-year terms.
Easy Accessibility
There are over 1.5 lakh post offices across India, making it easy even for rural investors to benefit from these schemes.
see also: Post Office Time Deposit Scheme Will Give More Profit Than FD of Any Bank
Post Office’s Great Scheme FAQs
Q1. Can I invest more than ₹2 lakh in Post Office FD or POMIS?
Yes. You can invest higher amounts. However, POMIS has an individual maximum limit of ₹9 lakh and ₹15 lakh for joint accounts.
Q2. Is there any risk in investing in these Post Office schemes?
No. These schemes are government-guaranteed, making them one of the safest investment options.
Q3. What happens if I withdraw before 5 years?
Premature withdrawal is allowed after 1 year with certain penalties on interest.
Q4. Are the returns taxable?
Yes. The interest earned is taxable according to your income tax slab, but the principal invested in 5-year FDs qualifies for deductions under Section 80C.
Q5. Can NRIs invest in Post Office schemes?
No. Only resident Indians are eligible to invest in Post Office savings schemes.
