Post Office Monthly Income Scheme – Looking for a safe and reliable way to earn a fixed income each month? The Post Office Monthly Income Scheme, also known as POMIS, might be exactly what you need. It’s gaining popularity across India, especially among retirees and conservative investors who prefer safety over high-risk returns.
So, what’s making this scheme stand out? Let’s break it down in plain English.
What Is POMIS?
POMIS is a savings plan offered by the India Post Office. It allows you to invest a lump sum amount and earn a guaranteed monthly income through interest payouts. The government backs this scheme, so it’s completely safe and ideal for people who don’t want to take chances with their money.
You make one investment, and every month, you get interest credited directly into your savings account. The plan runs for a fixed term of five years, after which your initial investment is returned.
Who Can Open This Account?
Any resident Indian can open a POMIS account. You can choose to open it individually or with others. In fact, you can open a joint account with up to three adults. Parents or guardians can also open an account in the name of a minor above 10 years of age.
How Much Can You Earn?
The current interest rate under POMIS is 7.4 percent per year, and the interest is paid out monthly. Here’s an idea of how much you’ll need to invest depending on how much income you want each month:
- To earn about 2,000 rupees a month, you’ll need to invest around 3.25 lakh rupees.
- For a monthly income of around 5,000 rupees, you’d need to deposit close to 8.1 lakh rupees.
- If you want to earn close to 10,000 rupees each month, your one-time investment should be approximately 16.2 lakh rupees.
Keep in mind, the maximum you can deposit in a single account is 15 lakh rupees. However, in a joint account, the limit is higher—up to 30 lakh rupees.
Why Consider POMIS?
There are several reasons why this scheme makes sense for many people:
- Security: Your money is completely safe, as it is backed by the Indian government.
- Fixed returns: You’ll know exactly how much you’re earning each month.
- Convenience: Accounts can be opened at any post office in the country.
- No market dependency: Your earnings aren’t affected by stock market ups and downs.
This plan is great for people who need a steady flow of money, such as senior citizens, homemakers, or even younger investors with a lump sum to park.
Let’s Talk Numbers
To give you a better idea, here’s what your investment would look like over five years:
- Investing 1 lakh will earn you around 616 rupees per month, adding up to roughly 36,960 rupees in interest over five years.
- A 5 lakh investment gets you about 3,080 rupees monthly, totaling over 1.8 lakh in interest in five years.
- If you put in the maximum allowed 15 lakh, you could earn roughly 9,240 rupees a month. That’s over 5.5 lakh in total interest by the end of the five-year period.
At maturity, you’ll get your full investment back.
How Do You Open an Account?
Opening a POMIS account is straightforward. Just follow these steps:
- Visit your nearest post office.
- Fill out the POMIS account opening form.
- Provide basic KYC documents like Aadhaar, PAN card, and a passport-size photo.
- Make your deposit through cash or cheque.
- Choose between opening a single or joint account.
- You’ll receive a passbook with all your account details.
Things You Should Know
Before you invest, here are a few important points to consider:
- The lock-in period is five years, but you can withdraw early after one year with a small penalty.
- The interest you earn is taxable, but there’s no TDS (tax deducted at source).
- Monthly interest is not reinvested or compounded.
- It’s not meant for high returns, but rather for consistent, safe income.
Is POMIS the Right Choice for You?
This scheme is perfect for anyone who wants a guaranteed return without worrying about market volatility. It suits retired individuals, cautious investors, and families who need predictable income for their monthly needs.
However, if your goal is high growth or wealth building over time, other investment options might offer better returns. Still, for peace of mind and financial stability, POMIS is hard to beat.
Always consider speaking with a financial advisor before making any investment decision. Your financial goals, risk appetite, and time horizon should guide your choices.