The Post Office Monthly Income Scheme (POMIS) is one of the most popular investment options in India, offering a steady monthly income with low risk. Backed by the Government of India, this savings scheme is ideal for retirees, conservative investors, and individuals looking for stable returns. The best part? You can earn money every month while sitting at home without worrying about stock market fluctuations.
Post Office Monthly Income Scheme (POMIS)
| Feature | Details |
|---|---|
| Interest Rate | 7.4% per annum (as of 2024) |
| Payout | Monthly interest earnings |
| Minimum Deposit | ₹1,000 |
| Maximum Deposit | ₹9 lakh (single), ₹15 lakh (joint) |
| Lock-in Period | 5 years |
| Premature Withdrawal | Allowed with penalty after 1 year |
| Tax Benefits | No tax exemption, interest is taxable |
| Official Website | India Post |
If you’re looking for a safe, fixed-income investment that provides regular monthly income, the Post Office Monthly Income Scheme (POMIS) is a great option. However, since interest is taxable and returns are fixed, you may also consider diversifying your portfolio with mutual funds, fixed deposits, or senior citizen savings schemes.
What is the Post Office Monthly Income Scheme (POMIS)?
POMIS is a fixed-income investment plan offered by the Indian Post Office. Investors deposit a lump sum amount, and in return, they receive monthly interest payouts at a fixed rate. The scheme is perfect for those who seek a secure investment with guaranteed income, such as retirees, homemakers, and risk-averse investors.
see also: Post Office Investment Scheme How to Double Your Money
Why is POMIS So Popular?
- Government-Backed Security: Being a sovereign-backed scheme, your money is safe from market volatility.
- Assured Monthly Returns: Unlike mutual funds or stocks, POMIS guarantees a fixed monthly income.
- Simple and Hassle-Free: Anyone can open an account with minimal paperwork.
- Joint Investment Option: You can invest up to ₹15 lakh in a joint account.
- Ideal for Regular Expenses: Monthly payouts can help manage household expenses, EMIs, or other financial commitments.
How Does POMIS Work?
Let’s break it down with a simple example:
- Suppose you invest ₹5 lakh in POMIS.
- The current interest rate is 7.4% per annum.
- Monthly income = (₹5,00,000 × 7.4%) ÷ 12 = ₹3,083.
- This amount will be credited to your bank account every month for 5 years.
Step-by-Step Guide to Opening a POMIS Account
1. Eligibility Criteria
- Only Indian residents can open a POMIS account.
- Minors above 10 years can also open an account with a guardian.
- Hindu Undivided Families (HUFs) and NRIs are NOT eligible.
2. Documents Required
To open a POMIS account, you’ll need:
- Aadhaar Card (or any valid ID proof)
- Address proof (Utility bill, passport, voter ID, etc.)
- PAN Card
- Passport-size photographs
- Initial deposit (Minimum ₹1,000)
3. Visit the Nearest Post Office
- Collect and fill out Form-A (Account Opening Form).
- Attach all required documents.
- Submit the deposit amount via cash, cheque, or demand draft.
4. Account Activation & Monthly Payouts
- Once processed, you will receive a POMIS passbook.
- Interest will be credited every month to your savings account.
Withdrawal & Premature Closure Rules
- Before 1 year: No withdrawals allowed.
- Between 1-3 years: 2% penalty on deposited amount.
- After 3 years: 1% penalty on deposited amount.
- After 5 years: You can withdraw the full amount without penalty.
POMIS vs Other Investment Options
| Feature | POMIS | Fixed Deposit | Mutual Funds |
|---|---|---|---|
| Risk | Low | Low | High |
| Returns | Fixed (7.4%) | 6-8% | 10-15% (varies) |
| Liquidity | Limited (5-year lock-in) | Flexible | High |
| Tax Benefits | No | No | Yes (ELSS funds) |
Pros & Cons of POMIS
Pros:
- Safe and risk-free investment.
- Steady monthly income.
- Simple and easy to manage.
- Joint accounts allow higher investments.
Cons:
- Interest is taxable.
- No automatic reinvestment option.
- Returns may not beat inflation over time.
see also: The Truth About “No Risk, High Return” Investment Schemes
Post Office Monthly Income Scheme (POMIS) FAQs
1. Can I open multiple POMIS accounts?
Yes, but the combined limit across all accounts cannot exceed ₹9 lakh (single) or ₹15 lakh (joint).
2. Can I transfer my POMIS account to another post office?
Yes, you can transfer your account to any post office in India.
3. Is POMIS better than a Fixed Deposit (FD)?
Both have similar safety levels, but POMIS offers a fixed monthly payout, while FD interest is typically paid quarterly or at maturity.
4. Can NRIs invest in POMIS?
No, only Indian residents are eligible.
5. What happens if I don’t withdraw my interest monthly?
The interest will not earn additional returns if left unclaimed.
