Are you looking for a safe, reliable, and government-backed way to earn a steady monthly income? The Post Office Monthly Income Scheme (POMIS) might just be the perfect solution for you. Recently, headlines have been buzzing about how one can earn ₹5,000 or even ₹8 lakhs every month through this simple yet powerful scheme. Sounds intriguing, right? Let’s break it down in a clear, practical way so that everyone, from beginners to financial pros, understands exactly how it works.
Post Office Monthly Income Scheme (POMIS)
| Feature | Details |
|---|---|
| Scheme Name | Post Office Monthly Income Scheme (POMIS) |
| Annual Interest Rate (2025) | 7.4% p.a., payable monthly |
| Minimum Investment | ₹1,000 |
| Maximum Investment (Single Account) | ₹9 lakh |
| Maximum Investment (Joint Account) | ₹15 lakh |
| Monthly Income Example | ₹5,000 monthly income = ~₹8.11 lakh investment |
| Account Tenure | 5 years |
| Premature Withdrawal | Allowed after 1 year with applicable penalties |
| Official Website | India Post |
The Post Office Monthly Income Scheme (POMIS) is an excellent option for those seeking secure, fixed monthly income without worrying about market risks. While claims of earning ₹8 lakh monthly may be exaggerated due to investment caps, the scheme still serves as a trustworthy tool for retirees, conservative investors, and those looking to supplement income.
What Is the Post Office Monthly Income Scheme (POMIS)?
The Post Office Monthly Income Scheme (POMIS) is one of the most popular savings plans offered by India Post. It’s designed for individuals who prefer guaranteed returns and want to enjoy a fixed monthly income. Since it’s backed by the Government of India, the scheme is considered extremely safe and trustworthy.
Here are the basics:
- You deposit a lump sum amount.
- Every month, you receive interest income directly into your account.
- After 5 years, your initial deposit is returned in full.
Who Should Consider POMIS?
This scheme is ideal for:
- Retirees seeking a fixed monthly income.
- Conservative investors wanting low-risk options.
- Parents investing for children (minor accounts allowed).
- Anyone wanting to supplement their regular income safely.
see also: How to Make a Profit of ₹ 3 Lakh by Saving ₹ 70 Per Day in PPF Scheme
How Much Can You Earn from POMIS?
Example 1: Earning ₹5,000 Monthly
Let’s do some simple math.
Annual Interest Rate: 7.4%
Target Monthly Income: ₹5,000
Formula:
Required Investment = (Target Monthly Income x 12) / Annual Interest Rate
So,
(₹5,000 x 12) / 0.074 = ~₹8,10,811
That means, to get ₹5,000 per month, you’d need to invest approximately ₹8.11 lakh.
Example 2: Can You Earn ₹8 Lakh Monthly?
To get ₹8,00,000 monthly, the calculation is:
(₹8,00,000 x 12) / 0.074 = ~₹13,03,00,000
Clearly, ₹13.03 crore is far beyond the maximum permitted limit (₹9 lakh for single and ₹15 lakh for joint accounts). Hence, while the scheme is excellent, it has practical investment caps that prevent ultra-high monthly returns.
Step-by-Step Guide to Open a POMIS Account
Step 1: Eligibility Check
Special FD Scheme of HDFC Bank Offering 7.90% Interest to End on March 31: Avail Benefits Soon!
- Any resident Indian.
- Minors above 10 years can open an account in their name.
- Joint accounts allowed (up to 3 adults).
Step 2: Gather Required Documents
- Identity Proof (Aadhaar, PAN Card)
- Address Proof (Utility Bill, Voter ID)
- Passport-sized photographs
Step 3: Visit Your Nearest Post Office
- Fill out the POMIS Account Opening Form (Form A).
- Submit documents and required investment (cheque/cash).
- Nomination facility available.
Step 4: Start Earning Monthly
- Interest credited monthly.
- After 5 years, withdraw the entire principal.
Tax Implications of POMIS
- Interest earned is taxable.
- No TDS (Tax Deducted at Source) by Post Office.
- Investors need to declare income under Income from Other Sources when filing returns.
Pro Tip: For those in higher tax brackets, consider combining POMIS with tax-saving schemes like PPF (Public Provident Fund) or ELSS (Equity Linked Savings Schemes).
Alternatives for High Corpus Accumulation
If your goal is wealth creation rather than fixed income, here are alternatives:
1. Public Provident Fund (PPF)
- Interest Rate: 7.1% p.a. (compounded annually)
- Tenure: 15 years
- Max Investment: ₹1.5 lakh/year
- Tax Benefits: Section 80C deductions
2. Senior Citizen Savings Scheme (SCSS)
- Interest Rate: 8.2% p.a. (2025 rate)
- Eligibility: 60+ years
3. RBI Floating Rate Savings Bonds
- Interest Rate: 8.05% (as of Jan 2025)
- Tenure: 7 years
- No investment cap.
see also: Don’t Have a Credit History? No Worries, know 5 Ways to Get a Credit Card
Advantages and Disadvantages of POMIS
| Pros | Cons |
|---|---|
| Government-backed and very safe | Interest is taxable |
| Fixed monthly income | No tax benefits on principal |
| Low minimum investment (₹1,000) | Max limit (₹9 lakh/single, ₹15 lakh/joint) |
| Premature closure allowed after 1 year | Lower returns compared to market-linked instruments |
Post Office Scheme FAQs
1. Is the Post Office Monthly Income Scheme safe?
Yes, it is backed by the Government of India and is one of the safest investment avenues.
2. Can NRIs invest in POMIS?
No, only resident Indians are eligible.
3. Can I transfer my POMIS account?
Yes, you can transfer your account to any post office branch in India.
4. Can I withdraw before 5 years?
Yes, after 1 year. Penalty applies:
- 1-3 years: 2% deduction on principal
- After 3 years: 1% deduction
5. Is POMIS better than FD?
POMIS offers similar safety but provides monthly payouts, making it better for regular income seekers.
