If you’re looking for a safe investment option that offers guaranteed monthly income, the Post Office Monthly Income Scheme (POMIS) is worth your attention. Often compared to Systematic Investment Plans (SIPs) due to its monthly payout feature, POMIS stands out as a low-risk, government-backed scheme perfect for those who prefer stable returns without market risks.
In this article, we’ll explain everything you need to know about POMIS, how it compares to SIPs, who should consider investing, and how to open an account. Whether you’re a new investor, a retiree seeking steady income, or a professional evaluating safe investment instruments, this guide will walk you through all the essentials.
Post Office Monthly Income Scheme (POMIS)
| Feature | Details |
|---|---|
| Scheme Name | Post Office Monthly Income Scheme (POMIS) |
| Interest Rate (as of March 2025) | 7.4% p.a. (payable monthly) |
| Lock-in Period | 5 years |
| Minimum Investment | ₹1,000 |
| Maximum Investment Limit | ₹9 lakh (single account), ₹15 lakh (joint account) |
| Eligibility | Indian residents only |
| Tax Benefits | Interest taxable; No TDS |
| Premature Withdrawal | Allowed after 1 year with penalty (2% deduction if closed between 1-3 years, 1% deduction after 3 years) |
| Official Website | India Post |
The Post Office Monthly Income Scheme (POMIS) is a safe, stable, and reliable alternative to SIPs for those seeking guaranteed monthly income without the stress of market volatility. Whether you’re planning for retirement, building financial security, or looking for diversification, POMIS offers a government-backed solution that delivers consistent returns.
What is Post Office Monthly Income Scheme (POMIS)?
The Post Office Monthly Income Scheme is a fixed-income investment scheme offered by India Post. It provides investors with guaranteed monthly returns through interest payouts, making it an attractive option for risk-averse individuals.
Unlike mutual fund SIPs, where returns fluctuate based on market performance, POMIS guarantees fixed returns backed by the Government of India. It is ideal for those who prefer capital safety and predictable income over high-risk, high-reward investments.
see also: 8.6% Interest Rate, How Much Benefit Will Investors Get?
POMIS vs SIP: How Are They Different?
| Criteria | POMIS | SIP (Systematic Investment Plan) |
|---|---|---|
| Risk Level | Low (Government-backed, risk-free) | Moderate to High (Market-linked, returns not guaranteed) |
| Returns | Fixed (Currently 7.4% p.a.) | Varies (8%-15% average, depends on market performance) |
| Tenure | 5 years (Lock-in) | Flexible, no mandatory lock-in (unless in ELSS) |
| Tax Benefit | No tax benefits on interest | No tax benefit (except ELSS SIPs) |
| Liquidity | Withdrawal allowed after 1 year with penalty | High liquidity (can redeem anytime in most funds) |
| Ideal For | Retirees, conservative investors, risk-averse people | Young investors, high-risk takers, long-term wealth creation |
If you’re someone who can’t afford to lose capital or prefer predictable returns, POMIS is the safer bet. If you’re comfortable with market volatility and are aiming for higher returns, SIPs might be better suited.
Benefits of Investing in POMIS
1. Guaranteed Returns
Your interest is locked at the declared rate (currently 7.4%) for 5 years, ensuring consistent monthly payouts.
2. Capital Protection
Being a government-backed scheme, your principal investment is secure, unlike market-linked products.
3. Joint Account Option
You can open a joint account with up to three adults, allowing you to pool investments up to ₹15 lakh.
4. Simple Process
Investing in POMIS is straightforward and can be done at any post office with minimal documentation.
How Much Can You Earn?
Let’s say you invest ₹9 lakh (maximum limit for single account) in POMIS at 7.4% annual interest:
- Annual Interest = ₹9,00,000 × 7.4% = ₹66,600
- Monthly Payout = ₹66,600 ÷ 12 = ₹5,550 per month
Over 5 years, you will receive ₹66,600 x 5 = ₹3,33,000 as interest, along with your ₹9 lakh principal at maturity.
Step-by-Step Guide to Open a POMIS Account
Step 1: Visit Your Nearest Post Office
Locate any India Post Office branch offering savings schemes.
Step 2: Fill Out Application Form
Request and complete the POMIS account opening form.
Step 3: Submit Required Documents
Prepare the following:
- Identity proof (Aadhaar, PAN, Passport)
- Address proof
- Passport-sized photograph
- Deposit cheque/cash for initial investment
Step 4: Nomination Facility
You can nominate a beneficiary at the time of account opening.
Step 5: Account Activation
Once verified, your account will be active, and you will start receiving monthly interest payouts.
Tax Implications of POMIS
- Interest earned is fully taxable as per your income slab.
- However, there is no TDS (Tax Deducted at Source) on interest.
- You must declare interest income in your ITR (Income Tax Return) annually.
Unfortunately, POMIS does not offer deductions under Section 80C.
see also: Important Information for Those Investing in FD
Post Office Monthly Income Scheme (POMIS) FAQs
1. What is the current interest rate of POMIS?
As of March 2025, the interest rate is 7.4% per annum, payable monthly.
2. Can NRIs invest in POMIS?
No, only resident Indian citizens are eligible.
3. What is the lock-in period?
POMIS has a 5-year lock-in period. Early withdrawal is allowed after 1 year, subject to penalties.
4. Is the interest income tax-free?
No, interest earned is fully taxable, but no TDS is deducted.
5. Can I transfer my account to another post office?
Yes, POMIS accounts are transferable between post offices across India.
