When it comes to safe investments that offer guaranteed returns, the Post Office Monthly Income Scheme (POMIS) stands out as one of the most reliable options in India. Backed by the Government of India and operated through India Post, this scheme is a popular choice among retired individuals, conservative investors, and families looking for stable monthly income.
The unique selling point? It offers a fixed monthly interest, making it perfect for those who prefer steady, risk-free returns over market-linked volatility. In this article, we’ll break down everything you need to know about this scheme—eligibility, interest rates, benefits, examples, and how to open an account—in simple, easy-to-understand language.
Post Office Monthly Income Scheme (POMIS)
| Feature | Details |
|---|---|
| Scheme Name | Post Office Monthly Income Scheme (POMIS) |
| Interest Rate (as of April 2025) | 7.4% per annum, paid monthly |
| Minimum Investment | ₹1,000 |
| Maximum Investment Limit | ₹9 lakh (individual); ₹15 lakh (joint account) |
| Lock-in Period | 5 years |
| Interest Payout | Monthly |
| Tax Benefits | Interest is taxable, but no TDS |
| Best Suited For | Retirees, homemakers, low-risk investors |
| Where to Apply | India Post |
The Post Office Monthly Income Scheme (POMIS) is a perfect fit for investors looking for a safe, government-backed investment that pays a fixed monthly income. Whether you’re a retiree managing household expenses or a conservative saver avoiding stock market risks, this scheme offers a peace-of-mind investment with a predictable return.
What Is the Post Office Monthly Income Scheme (POMIS)?
The POMIS is a savings scheme offered by the Department of Posts (India Post) that allows individuals to earn a fixed monthly interest on a one-time lump sum deposit. It’s designed to provide financial stability with a predictable income stream, especially beneficial for senior citizens, pensioners, or anyone who wants consistent returns without market risks.
The money is safe and government-backed, so there is zero risk of default, making it one of the most trusted savings options in India.
see also: HDFC Bank Made Customers Happy on 18-Month FD
Interest Rate and Earnings – Let’s Do the Math
As of April 2025, the interest rate on POMIS is 7.4% per annum, paid out on a monthly basis. The interest is calculated on the total amount you invest and is credited directly to your Post Office savings account.
Example Calculation
सिर्फ ₹1000 लगाइए और पाएं ₹11 लाख से ज्यादा! पोस्ट ऑफिस की FD स्कीम दे रही बैंकों से ज़्यादा ब्याज
If you invest ₹9 lakh (maximum for a single account):
- Annual interest = ₹9,00,000 × 7.4% = ₹66,600
- Monthly interest = ₹66,600 ÷ 12 = ₹5,550 per month
That’s a fixed ₹5,550 every month for five years — a solid passive income stream!
Eligibility Criteria: Who Can Open a POMIS Account?
To be eligible, you must:
- Be a resident Indian (NRI not allowed)
- Be 18 years or older to open an individual account
- Minors aged 10 and above can also open an account, which they can control upon turning 18
You can open the account either as a single holder, joint holder (up to 3 adults), or for a minor.
Investment Limits and Lock-In Period
| Account Type | Minimum Investment | Maximum Limit |
|---|---|---|
| Single | ₹1,000 | ₹9 lakh |
| Joint (up to 3 people) | ₹1,000 | ₹15 lakh |
| Minor’s Account | ₹1,000 | ₹3 lakh |
The lock-in period is 5 years, after which the full principal amount is returned to you.
Note: Premature closure is allowed after 1 year, but penalties apply (explained below).
Monthly Interest Payout – How Does It Work?
One of the best features of POMIS is the monthly payout of interest. The first payout happens one month after account opening, and subsequent interest is credited every month, directly to your linked Post Office savings account.
To simplify it:
- If you open the account on April 10, your first interest credit will be on May 10, and so on every month.
This makes it ideal for meeting monthly expenses — like groceries, utility bills, or even gifting your grandchildren.
Taxation Rules: What You Should Know
- Interest earned is taxable under “Income from Other Sources.”
- No TDS (Tax Deducted at Source) is applicable, even if your interest income is above ₹10,000.
- However, you need to declare it when filing ITR and pay tax accordingly, depending on your income slab.
For those in the lowest tax bracket (up to ₹5 lakh), this scheme can still be quite tax-efficient with rebates under Section 87A.
Premature Withdrawal: Can You Exit Early?
Yes, but with penalties:
- After 1 year but before 3 years: 2% of the principal will be deducted as penalty
- After 3 years but before 5 years: 1% penalty on principal
This ensures liquidity in case of emergency, though the full benefit is gained if you complete the 5-year term.
How to Open a POMIS Account – Step-by-Step Guide
Step 1: Visit your nearest Post Office
Step 2: Open a Post Office savings account (if you don’t have one)
Step 3: Fill out Form A (Application for POMIS)
Step 4: Submit documents:
- Aadhaar card
- PAN card
- Address proof
- Passport-size photos
Step 5: Make your initial investment via cash, cheque, or demand draft
Your account will be activated on the same day, and you will start earning interest from the very next month.
Why Should You Choose POMIS?
Here’s why this scheme is a favorite among Indian investors:
- Government-Backed – Zero risk of loss
- Fixed Returns – Unlike FDs, the rate remains unchanged for 5 years
- Monthly Payout – Regular passive income
- Flexible Investment – Start from just ₹1,000
- Joint Holding – Great for families or spouses
Alternatives to Consider
If you’re comparing POMIS to other options:
- Senior Citizens Savings Scheme (SCSS) – Offers higher interest (8.2%) but only for those aged 60+
- Post Office Fixed Deposit – 7.5% (for 5-year term), but no monthly income
- RBI Floating Rate Bonds – 8.05% returns, but interest paid every 6 months
Each has pros and cons, but POMIS wins for guaranteed, regular monthly income.
see also: If You Deposit ₹30,000 Every Year, You Will Get ₹8,13,642
Post Office Monthly Income Scheme FAQs
1. Is the interest rate fixed for 5 years?
Yes, once you open your POMIS account, the interest rate remains fixed for the entire 5-year term, regardless of future rate changes.
2. Can NRIs invest in POMIS?
No, Non-Resident Indians (NRIs) are not eligible to invest in this scheme.
3. Is it better than a bank FD?
If you want monthly income, POMIS is better. Bank FDs typically offer interest quarterly or on maturity.
4. Can I transfer my POMIS account?
Yes, you can transfer your POMIS account from one post office to another across India.
5. Is the maturity amount taxable?
No, only the monthly interest is taxable. The principal returned after 5 years is not taxed.
