Let us see about Post Office Monthly Income Scheme (POMIS) investment in India below in detailed.
The Post Office Monthly Income Scheme (POMIS) is a government-backed savings scheme in India, offered by India Post since 1969, providing secure, regular monthly payouts with a 5-year tenure, 7.4% annual interest rate for FY 2025-26 (paid monthly), and taxable interest income. Designed for risk-averse investors like retirees, homemakers, and those seeking steady cash flow, it ensures capital protection, simple monthly interest credits to a linked savings account, and is ideal for supplementing pension or fixed income needs.
Where Should I Apply for a POMIS Account?
Open POMIS accounts easily at these authorized post offices with basic KYC documents (Aadhaar, PAN/photo optional, address proof).
- Post Offices: All head post offices and select sub-post offices across India, cash/cheque deposits accepted, passbook issued for tracking.
- Online via IPPB: India Post Payments Bank app or website using Aadhaar eKYC for quicker setup (limited branches).
- Documents Required: Account opening form, ID/address proof, 2 photos, nominee details; minors need guardian ID.
- Deposit Methods: Cash/cheque at counter, NEFT/online transfer, single lump-sum deposit only (no installments).
Guardian opens for minors (under 10), joint accounts up to 3 adults allowed; transfer between post offices possible anytime.
Eligibility Criteria
POMIS is open to most Indian residents for straightforward monthly income generation.
- Adults (10+ years): Any individual, employed/self-employed/homemakers qualify.
- Minors (under 10): Guardian opens and operates.
- Joint Accounts: Up to 3 holders (max ₹15 lakh limit combined).
- One primary limit per first holder: Max ₹9 lakh single/₹15 lakh joint; multiple accounts allowed if limits not exceeded nationwide.
Each person’s individual account is up to 9 lakhs maximum. And in joint account maximum is 15 lakh.
Who is Not Eligible
Restrictions keep it focused on residents and individuals.
- NRIs/HUFs: Cannot open new accounts.
- Institutions: Trusts, companies, societies ineligible.
- Excess Deposits: Tracked via KYC, surplus forfeited without interest.
Examples:
In a family, Father opens single ₹4.5 lakh(2 accounts) = Possible(Maximum investment is ₹9 lakh), similarly Mother can also open single ₹4.5 lakh(2 accounts) = possible(Maximum investment is ₹9 lakh)
If father has joint account ₹15 lakh with Mother, like ₹7.5 lakh each or whatever combination they can opt for but not exceeding 15 lakh mark(total ₹15 lakh for joint account).
Father can open separate single account of ₹9 lakh, similarly Mother can open separate single account of ₹9 lakh.
Key Rule: Limit per account holder (min ₹1,000, max ₹9 lakhs as mentioned above).
Key Features
- Interest Rate: 7.4% p.a. for FY 2025-26 (Q4), reviewed quarterly, paid monthly on full principal (no compounding in scheme).
- Tenure: Fixed 5 years, auto-closure at end, principal returned.
How Interest Works
- Calculation: Simple interest monthly (7.4%/12 on principal).
- Crediting: 5th of each month to linked post office savings account.
- Example: ₹4.5 lakh deposit yields ≈₹2,775/month (₹33,300/year).
- Taxation: Fully taxable as “Income from Other Sources” (no 80C benefit).
- No Risk: Sovereign guarantee on principal and payouts.
Loans, Withdrawals & Extensions (Limited Flexibility)
Loans
Not available
Premature Closure
- Before 1 year: Not allowed.
- 1-3 years: 2% principal penalty.
- 3-5 years: 1% penalty.
- Death: Nominee gets full principal + interest immediately.
Post-Maturity
Reinvest principal in new POMIS or other schemes, no auto-extension.
Common Mistakes & Penalties (Avoid These)
- Multiple excess accounts: Deposits forfeited.
- Late deposits: Not allowed (lump-sum only).
- Ignoring penalties: Can lose 1-2% on early exit.
- Tax oversight: Report interest in ITR.
POMIS Example (₹4.5 lakh single at 7.4%)
| Year | Principal (₹) | Monthly Payout (₹) | Annual Interest (₹) | Maturity Principal (₹) |
|---|---|---|---|---|
| 1 | 4,50,000 | 2,775 | 33,300 | 4,50,000 |
| 2 | 4,50,000 | 2,775 | 33,300 | 4,50,000 |
| 3 | 4,50,000 | 2,775 | 33,300 | 4,50,000 |
| 4 | 4,50,000 | 2,775 | 33,300 | 4,50,000 |
| 5 | 4,50,000 | 2,775 | 33,300 | 4,50,000 |
Final Totals
- Total Investment: ₹4,50,000
- Total Interest: ₹1,66,500 (taxable)(Monthly 2,775 paid out).
- Principal Returned: ₹4,50,000. For joint ₹9 lakh: Double payouts (₹5,550/month).
So if a person investing ₹4,50,000 amount in this scheme, gets 2,775 monthly payout for 5 years, and he gets his principal investment amount ₹4,50,000 at the end of 5 year tenure.
This is all about POMIS investment scheme in India.
POMIS is an excellent, government-backed savings scheme that provides safe and steady monthly income for 5 years, making it ideal for risk-averse investors seeking capital protection.
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