Comprehensive Guide to Post Office Monthly Income Scheme (POMIS)
In an unpredictable economic climate marked by stock market volatility and fluctuating bank interest rates, secure fixed-income investments remain the cornerstone of sound financial planning. For Indian retirees, senior citizens, housewives, and risk-averse investors, the Post Office Monthly Income Scheme (POMIS) represents the gold standard of safety and predictability.
Administered by the Department of Posts under the Ministry of Communications and backed by a 100% sovereign guarantee from the Government of India, POMIS offers a fixed monthly income stream without exposing capital to market downturns. In recent Union Budgets, the Government enacted landmark reforms—expanding the maximum deposit limit from ₹4.5 Lakh to ₹9.0 Lakh for Single Accounts and from ₹9.0 Lakh to ₹15.0 Lakh for Joint Accounts. Senders and postal savings customers can also review our companion tools such as the India Postage Calculator and the Postal Life Insurance (PLI) Calculator.
Our free, interactive Post Office MIS Calculator allows you to calculate exact monthly pension credits, compare single vs. joint limits, evaluate premature exit penalties, and model the high-yielding "POMIS + RD" wealth multiplier strategy.
1. Key Features, Revised Deposit Limits & Eligibility Rules
Understanding the statutory parameters governed by the National Savings (Monthly Income Account) Scheme Rules ensures you maximize returns within legal boundaries:
| Parameter | Single Account | Joint Account (Up to 3 Adults) |
|---|---|---|
| Maximum Investment Limit | ₹9,00,000 (Nine Lakh Rupees) | ₹15,00,000 (Fifteen Lakh Rupees) |
| Minimum Deposit | ₹1,000 (Multiples of ₹1,000) | ₹1,000 (Multiples of ₹1,000) |
| Current Interest Rate (2026) | 7.4% per annum (Paid monthly) | 7.4% per annum (Paid monthly) |
| Maximum Monthly Payout | ₹5,550 per month | ₹9,250 per month |
| Maturity Period | 5 Years (60 Months) | 5 Years (60 Months) |
| Sovereign Safety Guarantee | 100% Guaranteed by Govt of India | 100% Guaranteed by Govt of India |
Eligibility Criteria:
- Resident Indian Citizens: Any adult resident Indian can open an individual or joint account. Non-Resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not eligible.
- Minors: Accounts can be opened on behalf of a minor aged 10 years and above (operated by a guardian until adulthood). The maximum limit for a minor account is ₹3,50,000.
- Joint Accounts: Up to 3 adults can hold a joint account with equal ownership share. An individual's combined holding across single and joint accounts cannot exceed ₹9.0 Lakh.
2. Mathematical Formula: How Monthly Interest is Calculated
POMIS interest is non-compounding and distributed at the end of every calendar month following deposit:
Total 5-Year Interest: Total Interest = Monthly Payout × 60 Months
Calculation Examples:
-
Case A (Single Account Max ₹9 Lakh):
Monthly Interest = ( ₹9,00,000 × 0.074 ) / 12 = ₹5,550.00 / month.
Total 5-Year Interest = ₹5,550 × 60 = ₹3,33,000.00.
At maturity, the original ₹9,00,000 principal is returned intact. Total benefit = ₹12,33,000.00. -
Case B (Joint Account Max ₹15 Lakh):
Monthly Interest = ( ₹15,00,000 × 0.074 ) / 12 = ₹9,250.00 / month.
Total 5-Year Interest = ₹9,250 × 60 = ₹5,55,000.00.
Total benefit = ₹20,55,000.00.
3. Premature Closure Rules & Penalty Deductions
While POMIS has a statutory lock-in of 5 years, India Post permits premature withdrawal after completing 1 year under specific penalty slabs:
| Premature Closure Timeline | Permissibility | Deduction / Penalty on Principal |
|---|---|---|
| 0 to 1 Year | Strictly Prohibited | No withdrawal permitted under any circumstances |
| 1 Year to 3 Years | Allowed | 2.0% deduction from original principal deposit |
| 3 Years to 5 Years | Allowed | 1.0% deduction from original principal deposit |
• If closed at 2 years: Penalty = 2% of ₹9,00,000 = ₹18,000 (Refund = ₹8,82,000).
• If closed at 4 years: Penalty = 1% of ₹9,00,000 = ₹9,000 (Refund = ₹8,91,000).
Note: All monthly interest payouts credited prior to closure are retained by the investor and not clawed back.
4. The "POMIS + RD" Double Compounding Strategy
Because POMIS credits monthly interest into your Post Office Savings Account (POSA) without compounding, leaving funds idle earns only a basic ~4.0% savings rate. Smart investors execute the POMIS to Recurring Deposit (RD) auto-transfer strategy to unlock compounding wealth creation!
1. Invest ₹15,00,000 in a Joint POMIS Account earning ₹9,250/month.
2. Instruct India Post to automatically route the ₹9,250 monthly payout into a 5-Year Post Office RD Account (6.7% p.a. quarterly compounding).
3. Over 5 years, total RD deposits equal ₹5,55,000, which compounds to ₹6,60,940 at maturity!
4. Combined with your ₹15 Lakh refund, your total maturity corpus reaches ₹21,60,940 (an effective CAGR of ~8.8% on initial capital!).
5. Taxation of Post Office MIS: TDS, Slabs & Section 80TTB
Understanding tax implications helps you project true post-tax liquidity:
- No TDS Deducted: Unlike commercial bank fixed deposits, the Department of Posts does not deduct Tax Deducted at Source (TDS) on POMIS interest payments under Section 194A.
- Taxable Under Other Sources: Aggregate annual interest is added to your total gross income under "Income from Other Sources" and taxed at your applicable slab rate. Calculate your net tax liability using our Income Tax Calculator.
- Section 80TTB Exemption for Senior Citizens (Aged 60+): Resident senior citizens can claim a tax deduction of up to ₹50,000 per financial year on aggregate interest earned across Post Office schemes and bank deposits under Section 80TTB.
- No Section 80C Benefit: Unlike Public Provident Fund (PPF) or 5-Year Post Office Time Deposits, initial principal deposits into POMIS do not qualify for Section 80C tax deductions. For retirement payroll planning, check our EPF / PF Calculator and Gratuity Calculator.
6. Comparative Analysis: POMIS vs. SCSS vs. Bank FDs vs. PMVVY
How does POMIS stack up against other popular fixed-income instruments in India?
| Feature / Scheme | Post Office MIS (POMIS) | Senior Citizen Savings (SCSS) | Bank Monthly Income FD |
|---|---|---|---|
| Current Interest Rate | 7.4% p.a. (Monthly) | 8.2% p.a. (Quarterly) | 6.5% to 7.2% p.a. (Monthly) |
| Entry Age Requirement | 18 Years (No upper limit) | Strictly 60+ Years (55+ for VRS) | No age restriction |
| Maximum Deposit Limit | ₹9L (Single) / ₹15L (Joint) | ₹30,00,000 per individual | No statutory ceiling |
| TDS Deducted? | NO TDS | Yes (If interest > ₹50k) | Yes (If interest > ₹40k / ₹50k) |
| Section 80C Tax Benefit | No | Yes (Up to ₹1.5 Lakh) | Only on 5-Yr Tax Saver FDs |
| Sovereign Backing | 100% Govt of India | 100% Govt of India | DICGC Insurance up to ₹5 Lakh |
7. Master POMIS Monthly Payout & Interest Chart
Quick-reference table showing monthly interest credits and 5-year aggregate returns across standard deposit amounts at the current 7.4% interest rate:
| Deposit Amount (₹) | Monthly Income (₹) | Annual Income (₹) | Total 5-Yr Interest (₹) | Total Maturity Value (₹) |
|---|---|---|---|---|
| ₹1,00,000 | ₹616.67 | ₹7,400.00 | ₹37,000.00 | ₹1,37,000.00 |
| ₹2,00,000 | ₹1,233.33 | ₹14,800.00 | ₹74,000.00 | ₹2,74,000.00 |
| ₹3,00,000 | ₹1,850.00 | ₹22,200.00 | ₹1,11,000.00 | ₹4,11,000.00 |
| ₹5,00,000 | ₹3,083.33 | ₹37,000.00 | ₹1,85,000.00 | ₹6,85,000.00 |
| ₹9,00,000 (Single Max) | ₹5,550.00 | ₹66,600.00 | ₹3,33,000.00 | ₹12,33,000.00 |
| ₹12,00,000 (Joint) | ₹7,400.00 | ₹88,800.00 | ₹4,44,000.00 | ₹16,44,000.00 |
| ₹15,00,000 (Joint Max) | ₹9,250.00 | ₹1,11,000.00 | ₹5,55,000.00 | ₹20,55,000.00 |
8. How to Open a Post Office MIS Account (Offline & IPPB Online)
Opening a POMIS account is simple and can be completed at any Department of Posts branch:
- Step 1 - Obtain Form 1: Collect the National Savings MIS Account opening application form (Form 1) from your nearest Head Post Office (HPO) or Sub Post Office (SO), or download it from the Official India Post Portal.
- Step 2 - Attach KYC Documentation: Provide self-attested copies of your Aadhaar Card (Proof of Identity & Address) and PAN Card along with 2 passport-sized color photographs.
- Step 3 - Deposit Funds: Submit cash (up to ₹50,000) or a crossed cheque drawn in favor of "Postmaster [Office Name]".
- Step 4 - Link Post Office Savings Account (POSA): Ensure you open or link a Post Office Savings Account. Submit an ECS mandate so monthly interest credits automatically route into your bank or POSA without needing manual branch visits.
- Step 5 - Receive Passbook: The post office issues a stamped POMIS passbook recording your account number, deposit sum, monthly interest schedule, and maturity date.
Frequently Asked Questions (FAQs)
What is the current interest rate for Post Office MIS in 2026?
The current interest rate for Post Office Monthly Income Scheme (POMIS) is 7.4% per annum, payable monthly. The interest rate remains fixed for the full 5-year duration from the date of account opening.
What is the maximum investment limit in POMIS for single and joint accounts?
The maximum deposit limit for a Single Account is ₹9,00,000. For a Joint Account (up to 3 adults), the limit is ₹15,00,000. An individual cannot hold more than ₹9 Lakh in aggregate across all single and joint accounts.
Can I close my Post Office MIS account before 5 years?
Yes, but only after completing 1 year. If closed between 1 year and 3 years, a 2% deduction penalty is levied on the principal deposit. If closed between 3 years and 5 years, a 1% deduction penalty applies.
Is TDS deducted from POMIS monthly interest payouts?
No. The Post Office does not deduct any TDS from interest payouts. However, the interest earned is fully taxable under your personal income tax slab. Senior citizens can claim up to ₹50,000 deduction under Section 80TTB.
What happens if I do not withdraw my monthly interest from POMIS?
Unclaimed monthly interest left in the POMIS account does not earn any interest. To avoid lost returns, link a Post Office Savings Account (POSA) with an auto-credit ECS mandate or set up a recurring deposit (RD) transfer.
Can a minor open a Post Office MIS account?
Yes. A minor aged 10 years and above can open and operate an account in their name. For children below 10 years, a parent or legal guardian can open the account. The maximum limit for a minor account is ₹3,50,000.
Can a joint POMIS account be converted into a single account?
Yes. A joint account can be converted into a single account (or vice versa) upon submitting a written application signed by all joint holders, provided individual holding limits (₹9 Lakh) are not breached.
Can I reinvest POMIS interest into Mutual Fund SIPs?
Yes. By setting up an auto-debit ECS from your linked savings bank account, you can route your monthly ₹5,550 or ₹9,250 POMIS interest directly into diversified equity index funds to build substantial long-term wealth.