The Post Office Saving Scheme is a trusted investment option for individuals looking for a secure and steady monthly income. With an 8.2% interest rate, the scheme offers retirees and investors a way to generate a pension of Rs 20,000 per month. In this guide, we will explain how to achieve this goal, investment limits, eligibility criteria, application steps, and expert insights.
Post Office Saving Scheme
| Feature | Details |
|---|---|
| Scheme Name | Post Office Monthly Income Scheme (POMIS) |
| Interest Rate | 8.2% per annum (as of 2024) |
| Investment Required for Rs 20,000/month Pension | Approximately Rs 32.43 lakh |
| Maximum Investment Limit | Rs 9 lakh (single) / Rs 15 lakh (joint) |
| Payout Frequency | Monthly |
| Lock-in Period | 5 years |
| Official Website | India Post |
The Post Office Monthly Income Scheme (POMIS) is a safe, government-backed option for generating a steady monthly pension. However, due to investment limits, achieving a Rs 20,000 monthly income requires diversifying with SCSS, fixed deposits, or mutual funds. By following the step-by-step application process, investors can benefit from reliable monthly earnings with minimal risk.
What is the Post Office Monthly Income Scheme (POMIS)?
POMIS is a government-backed investment plan designed to provide fixed monthly returns to investors. It is ideal for retired individuals, risk-averse investors, and those seeking guaranteed income.
Benefits of POMIS:
- Safe & Secure: Backed by the Government of India.
- Fixed Returns: Guaranteed monthly interest payouts.
- Easy Access: Available at all post offices across India.
- Low Risk: Unlike stock markets, there is no risk of losing capital.
Current Interest Rate
As of January-March 2024, the interest rate on POMIS is 7.4% per annum. However, for higher earnings, investors can combine it with the Senior Citizens’ Savings Scheme (SCSS), which offers 8.2% per annum.
see also: Sukanya Samriddhi Yojana
How to Get Rs 20,000 Per Month from POMIS?
To earn Rs 20,000 per month, an investor needs to calculate the required principal amount based on the monthly interest rate.
Calculation of Investment Required:
- Interest Rate: 7.4% per annum.
- Monthly Interest Rate: 7.4% / 12 = 0.6167%.
- Required Monthly Income: Rs 20,000.
- Formula: Principal = Monthly Income / Monthly Interest Rate.
- Required Investment: Rs 20,000 / 0.006167 ≈ Rs 32.43 lakh.
Investment Limitation: Since the maximum investment per individual is Rs 9 lakh, achieving Rs 20,000/month through POMIS alone is not possible. However, combining multiple accounts or alternative schemes can help.
Alternative Investment Options to Achieve Rs 20,000 Monthly Pension
To overcome the POMIS investment cap, consider these complementary schemes:
1. Senior Citizens Savings Scheme (SCSS)
- Interest Rate: 8.2% per annum.
- Investment Limit: Rs 30 lakh.
- Best for: Senior citizens above 60 years.
- Payout: Quarterly interest payments.
2. Post Office Time Deposit (POTD)
- Interest Rate: 7.5% for 5-year deposit.
- Tax Benefits: Under Section 80C of the IT Act.
3. Mutual Funds (SWP Strategy)
- Best for: Investors comfortable with low risk mutual funds.
- Systematic Withdrawal Plan (SWP): Generates fixed monthly income.
By diversifying investments, one can effectively generate Rs 20,000/month in pension.
Step-by-Step Guide to Apply for POMIS
Follow these simple steps to apply for the Post Office Monthly Income Scheme:
Step 1: Visit Your Nearest Post Office
- Locate a nearby India Post office.
- Carry necessary documents (Aadhaar, PAN, Address proof, Photos).
Step 2: Fill Out the POMIS Application Form
- Obtain the POMIS application form.
- Provide personal details and nominee information.
Step 3: Make the Initial Deposit
- Minimum investment: Rs 1,000.
- Maximum: Rs 9 lakh (Single) / Rs 15 lakh (Joint).
Step 4: Receive Account Passbook
- Once the deposit is made, you will receive a POMIS passbook.
Step 5: Monthly Interest Payout Begins
- Interest starts accumulating one month after investment.
- Payouts are credited to your linked savings account.
see also: Central Bank FD Scheme High-Interest Returns on 91-Day Fixed Deposits
Post Office Saving Scheme FAQs
1. Is POMIS taxable?
Yes, the interest earned is taxable as per income tax laws, but no TDS is deducted.
2. Can I withdraw money before 5 years?
Yes, but penalties apply:
- 1-3 years: 2% deduction from the principal.
- 3-5 years: 1% deduction.
3. Can I open multiple POMIS accounts?
Yes, you can open multiple accounts but within the overall limit of Rs 9 lakh (single) / Rs 15 lakh (joint).
4. Can NRIs invest in POMIS?
No, only Indian residents are eligible.
5. Is POMIS better than Fixed Deposits (FDs)?
POMIS offers higher interest rates than most bank FDs and guaranteed monthly payouts.
