If you’re looking for a safe, government-backed investment option that provides monthly income, then the Post Office Monthly Income Scheme (POMIS) is worth your attention. With rising costs and the need for steady income—especially for retirees, homemakers, and conservative investors—POMIS offers a guaranteed monthly payout that brings both financial stability and peace of mind.
Currently, the scheme offers 7.4% annual interest, paid out monthly, making it an attractive choice for those who want fixed returns without taking risks in the stock market.
Post Office Scheme
| Feature | Details |
|---|---|
| Scheme Name | Post Office Monthly Income Scheme (POMIS) |
| Interest Rate (Apr-Jun 2025) | 7.4% per annum |
| Monthly Income on Rs 9 lakh | Rs 5,550 per month |
| Tenure | 5 years |
| Minimum Deposit | Rs 1,000 |
| Maximum Deposit (Single) | Rs 9,00,000 |
| Maximum Deposit (Joint) | Rs 15,00,000 |
| TDS | Not applicable |
| Tax on Interest | Taxable as per individual slab |
| Official Link | India Post |
If you’re someone who values safety, stability, and consistent income, then the Post Office Monthly Income Scheme is a smart and secure investment. With guaranteed monthly payouts of Rs 5,550 on a Rs 9 lakh deposit, it’s a perfect fit for retirees, homemakers, and low-risk investors.
While the scheme doesn’t offer tax benefits or high returns, it serves a specific purpose: reliable monthly cash flow. And in today’s volatile market, that’s something many families truly need.
What is the Post Office Monthly Income Scheme (POMIS)?
The Post Office Monthly Income Scheme is a low-risk savings plan offered by India Post. It is designed to provide individuals with a steady monthly income through interest payments. Since the scheme is backed by the Government of India, it comes with zero default risk, making it ideal for risk-averse investors.
Launched to help middle-income households manage recurring expenses, POMIS is especially popular among senior citizens, retirees, and salaried individuals seeking financial consistency.
see also: PNB Bank Is Giving Good Returns in 3 Years
How Much Will You Earn Monthly by Depositing Rs 9 Lakh?
The current interest rate of 7.4% p.a. means that if you deposit Rs 9 lakh, you will earn:
Rs 9,00,000 x 7.4% = Rs 66,600 annual interest
Rs 66,600 / 12 = Rs 5,550 per month
This income is credited monthly into your Post Office Savings Account, offering a predictable source of cash every month for 5 years.
Who Can Invest in This Scheme?
The POMIS is open to all Indian residents, including:
- Individuals above 18 years of age
- Joint account holders (up to 3 adults)
- Parents/guardians on behalf of minors
However, Non-Resident Indians (NRIs) are not eligible to invest in this scheme.
Features That Make POMIS Attractive
1. Capital Protection
Since this is a government-backed scheme, your principal is safe and protected till maturity.
2. Fixed Monthly Returns
The interest is disbursed every month, which is great for those who need a regular income stream.
3. No TDS Deducted
Though the interest is taxable as per your income slab, no Tax Deducted at Source (TDS) is applied, giving you complete control over tax planning.
4. Nomination Facility
You can add a nominee to your account, making it easier for your legal heirs to claim the money in case of an unfortunate event.
How to Open a POMIS Account
Opening a POMIS account is simple and can be done at any India Post Office branch.
Steps to Open:
- Visit your nearest Post Office with valid KYC documents (Aadhaar, PAN, passport-sized photo).
- Fill out the application form for the Post Office Monthly Income Scheme.
- Deposit the amount (minimum Rs 1,000, maximum Rs 9 lakh for single accounts).
- Submit nominee details (optional but recommended).
- You will be given a passbook that keeps a record of all your transactions.
You can also transfer your POMIS account between post offices if needed.
Taxation Rules
- Interest earned is taxable, and must be reported under ‘Income from Other Sources’ when filing your ITR.
- No TDS is deducted by the Post Office.
- Since it doesn’t qualify for deductions under Section 80C, you won’t get tax benefits on the investment amount.
Should You Invest in POMIS?
POMIS is suitable for:
- Retirees looking for safe, monthly income
- Homemakers wanting to earn passive income
- Conservative investors who want low-risk investment avenues
However, it may not be ideal for those looking for high growth or wealth creation, as the returns are fixed and capital appreciation is limited.
see also: TD Scheme: On Investment of ₹5 Lakhs, You Will Get Interest of Only ₹2.24 Lakhs
Comparison: POMIS vs Fixed Deposits
| Feature | POMIS | Bank Fixed Deposit (5 years) |
|---|---|---|
| Interest Rate | 7.4% (Apr-Jun 2025) | 6.5%-7.5% (varies by bank) |
| Monthly Payout | Yes | Optional |
| TDS | No | Yes (above Rs 40,000/year) |
| Capital Guarantee | Government-backed | Bank-backed (with DICGC insurance) |
| Tax Benefit (80C) | No | Yes (only for Tax Saver FDs) |
Post Office Scheme FAQs
Q1. Is the interest rate fixed for 5 years?
Yes, once you open the POMIS account, the interest rate remains fixed for the full 5-year period.
Q2. Can I withdraw before 5 years?
Yes, but premature withdrawal comes with penalties:
- 2% deduction if closed between 1-3 years
- 1% deduction if closed between 3-5 years
Q3. Can I extend the account after maturity?
Yes, you can re-invest the maturity amount in the same scheme or another eligible post office scheme.
Q4. What happens if I invest more than the limit?
The excess amount will not earn interest and will be returned without any gain.
Q5. Can a minor hold a POMIS account?
Yes, a guardian can open the account on behalf of a minor. When the minor turns 18, the account can be converted to their name.
