These Two Schemes of Post Office Are Best for Investing a Big Amount – Know Which One Is Giving More Returns

If you’re looking to invest a big amount safely, two of the best options available in India right now are the Post Office Monthly Income Scheme (POMIS) and the Post Office Fixed Deposit (Time Deposit). These government-backed savings plans not only offer attractive interest rates, but they also provide stable returns, making them ideal for both new and experienced investors.

In this article, we’ll help you compare both POMIS and Post Office Fixed Deposit schemes in detail, so you can confidently decide which one suits your financial goals better. Whether you’re planning for retirement, building a secure savings base, or just exploring low-risk investment avenues—this guide has you covered.

Best Post Office Schemes for Big Investment

Feature	Post Office Monthly Income Scheme (POMIS)	Post Office 5-Year Fixed Deposit (TD)
Interest Rate	7.4% per annum (paid monthly)	7.5% per annum (paid annually)
Tenure	5 years	1, 2, 3, or 5 years (5-year option most popular)
Minimum Investment	₹1,000	₹1,000
Maximum Investment	₹9 lakh (individual), ₹15 lakh (joint)	No upper limit
Tax Benefits	No tax deduction	5-year FD qualifies under Section 80C
Payout	Monthly interest credited to account	Interest compounded quarterly, paid annually

Both the Post Office Monthly Income Scheme (POMIS) and the 5-Year Post Office Fixed Deposit are solid choices for big-ticket investments. If you want monthly income, POMIS is your friend. But if your goal is to grow your money with maximum returns and tax benefits, the 5-year FD wins the race.

Why Post Office Schemes Are Trusted for Large Investments

India Post has a long-standing reputation for offering secure and reliable investment products. Backed by the Government of India, these schemes are ideal for conservative investors who prefer guaranteed returns over risky market-linked options.

Here’s why many Indians—especially senior citizens, salaried individuals, and retirees—prefer post office schemes:

• Capital Safety: Investments are government-backed.
• Stable Interest Rates: Rates are reviewed quarterly and often match or beat bank FDs.
• Low Entry Barrier: Minimum deposit of just ₹1,000.
• Easy Access: Available at all post offices across India.

Now let’s break down each scheme to help you pick the one that aligns with your financial plan.

see also: You Can Also Take Advantage of These 5 Great Benefits of the Bank

Post Office Monthly Income Scheme (POMIS) – A Regular Income Source

What Is POMIS?

The Post Office Monthly Income Scheme (POMIS) is designed for individuals who want a steady monthly income. It’s especially beneficial for retirees, homemakers, and people looking to supplement their income without risking their capital.

Key Features of POMIS

• Interest Rate: 7.4% per annum, paid monthly.
• Investment Tenure: 5 years fixed.
• Maximum Limit: ₹9 lakh for individual accounts, ₹15 lakh for joint accounts.
• Minimum Investment: ₹1,000 in multiples of ₹1,000.
• Taxation: Interest is taxable, but there is no TDS (Tax Deducted at Source).
• Nomination Facility: Available.

Example

Let’s say you invest ₹9 lakh in POMIS. Here’s your monthly return:

• ₹9,00,000 x 7.4% ÷ 12 = ₹5,550 per month.

That’s a predictable, risk-free payout for 60 months.

Post Office Fixed Deposit (Time Deposit) – For Higher Returns

What Is Post Office Time Deposit?

Also known as the Post Office FD, this scheme offers fixed returns for a fixed duration. It’s perfect for those who want to lock in a lump sum and earn higher interest over time.

Key Features of 5-Year Post Office FD

• Interest Rate: 7.5% per annum (as of Q1 FY 2025-26).
• Tenure: Choose from 1, 2, 3, or 5 years.
• Minimum Deposit: ₹1,000.
• Maximum Deposit: No upper limit.
• Payout: Interest is compounded quarterly, paid annually.
• Tax Benefits: The 5-year deposit is eligible under Section 80C for tax deduction (up to ₹1.5 lakh per annum).

Example

If you invest ₹9 lakh in a 5-year FD at 7.5% interest:

• You’ll earn around ₹3.92 lakh in total interest by the end of 5 years.
• Final maturity amount = ₹12.92 lakh (approx.)

While you don’t get monthly payouts like POMIS, your money grows faster due to compounding.

POMIS vs. Post Office FD – Which One Gives Better Returns?

Let’s compare both options with an equal investment of ₹9 lakh over 5 years:

Criteria	POMIS	5-Year FD
Total Interest Earned	₹3.33 lakh (₹5,550 x 60 months)	₹3.92 lakh (approx.)
Tax Deduction	Not eligible	Eligible under Section 80C
Interest Payout	Monthly	Annually (compounded)
Best For	Those who need regular income	Those who want higher final maturity

Winner for Higher Returns: Post Office FD (5-Year)
Winner for Monthly Income: POMIS

How to Open These Schemes at the Post Office

You can easily open either scheme by visiting your nearest post office. Here’s how:

Step-by-Step Guide:

1. Visit the nearest Post Office.
2. Ask for the POMIS or Fixed Deposit (TD) application form.
3. Fill in your personal and nominee details.
4. Submit KYC documents: Aadhaar, PAN, passport-sized photo.
5. Make the deposit via cash, cheque, or bank transfer.
6. Collect your account passbook for regular updates.

You can also link your Savings Account for automatic credit of interest (especially useful for POMIS).

see also: NSC vs FD vs Lumpsum: Where to Invest ₹1,00,000 for 5 Years?

Best Post Office Schemes for Big Investment FAQs

Q1. Can I open both POMIS and Fixed Deposit accounts?

Yes, you can invest in both schemes simultaneously. Many investors diversify this way to balance liquidity and returns.

Q2. Are these schemes safe from market fluctuations?

Absolutely. Both are government-backed and are not linked to market volatility.

Q3. What happens if I withdraw early?

• POMIS: Premature withdrawal allowed after 1 year, with a small penalty.
• FD: Premature withdrawal is allowed but with lower interest.

Q4. Can NRIs invest in these post office schemes?

No, Non-Resident Indians (NRIs) are not allowed to invest in these schemes as per current rules.

Q5. Which is better for tax saving?

Only the 5-year Post Office FD is eligible for tax deduction under Section 80C.