Post Office Monthly Income Scheme (POMIS) for Steady Returns

Post Office Monthly Income Scheme (POMIS) is a prestigious scheme recognized by the Government as one of the best initiative under the Ministry of Finance. It provides a fixed monthly income to investors who deposit a lump sum amount for a tenure of 5 years.

The scheme is popular among risk-averse individuals seeking a steady income stream. The interest rate is set by the government and is paid out monthly. POMIS is accessible through post offices across India, making it a convenient investment option for those looking for a reliable source of income.

Post Office Monthly Income Scheme (POMIS) PDF File Download Now

With an impressive interest rate of 6.6%, this scheme guarantees monthly distribution of returns, making it one of the most attractive investment options. Let us look into the intricacies of this scheme and highlight the benefits it offers to investors looking for stable income sources.

Key PointDetails
Scheme NamePost Office Monthly Income Scheme (POMIS)
Interest Rate6.6%
Maturity PeriodMaximum 5 years
Number of Holders1 to 3 individuals
NominationPermitted, benefits go to the nominee in case of demise
TransferabilityTransferable across post offices in India
POMIS Bonus5% bonus for accounts opened before Dec 1, 2011
TaxabilityNo TDS, tax benefit: Income does not come under taxation
Capital ProtectionBacked by the Government, ensuring the safety of capital
Lock-in PeriodMinimum 5 years, withdrawable after maturity
Affordable PremiumLow monthly premium compared to other schemes
Inflation ResistanceProvides monthly income even during inflation
Multiple Fund OwnersJoint holders can collaborate on a single account
Ease of TransactionSimple processes for deposits, withdrawals, and management
Ideal forRisk-averse investors, especially senior citizens
Interest Rates (Current)1 year: 5.50%, 2 years: 5.50%, 3 years: 5.50%, 5 years: 7.6%
Maximum Investment LimitsSingle: ₹4,50,000, Joint: ₹9,00,000, Minor: ₹3,00,000
EligibilityIndian citizen residing in India, minimum age 18
ExclusionsNon-resident Indians not eligible
Application ProcessOffline, requires a Post Office savings account
Documents RequiredProof of Identity, Proof of Address, Passport-sized photos

Note: However, it’s important to note that POMIS has a fixed maturity period, and premature withdrawals may be subject to certain conditions and penalties.

I. Understanding Post Office Monthly Income Scheme (POMIS)

1.1 What is POMIS?

Post Office Monthly Income Scheme (POMIS) is a government-backed investment scheme designed to provide investors with a consistent monthly income. The scheme, offering an impressive interest rate of 6.6%, is managed by the Indian post office.

1.2 Key Features of POMIS

1.2.1 Maturity Period

The maximum tenure of POMIS is 5 years, providing investors with a reasonable time horizon for their financial goals.

1.2.2 Number of Holders

One to three individuals can hold a POMIS account, fostering joint investments and financial collaboration.

1.2.3 Nomination

Investors can nominate a beneficiary, ensuring seamless transfer of scheme benefits in the event of the investor’s demise.

1.2.4 Transferability

POMIS accounts can be easily transferred from one post office to another anywhere in India, enhancing the scheme’s accessibility.

1.2.5 POMIS Bonus

Accounts opened before December 1, 2011, enjoy a 5% bonus, providing an additional incentive for early investors.

1.2.6 Taxability

Income from POMIS is exempt from TDS, offering investors a tax-efficient investment avenue.

II. Benefits of Investing in POMIS

2.1 Capital Protection

Backed by the government, POMIS ensures the safety of the invested capital.

2.2 Low-Risk Investment

With no market capitalization risks, POMIS is a low-risk investment option, appealing to risk-averse investors.

2.3 Lock-in Period

The minimum lock-in period of 5 years ensures a stable investment horizon, with the flexibility to withdraw funds after maturity.

2.4 Affordable Premium Amount

The monthly premium for POMIS is comparatively low, accommodating a wide range of investors with varying financial capacities.

2.5 Inflation Resistance

Even during inflation, POMIS provides a monthly income stream, shielding investors from the erosive effects of rising prices.

2.6 Multiple Fund Owners

Joint holders can collaborate and jointly own a POMIS account, facilitating shared financial goals.

2.7 Ease of Transaction

The process of depositing, withdrawing, and managing funds in POMIS is remarkably straightforward, ensuring a hassle-free experience for investors.

2.8 Ideal for Risk-Averse Investors

Tailored for risk-averse investors seeking a reliable source of monthly income, POMIS is particularly advantageous for long-term and regular income objectives, making it an ideal choice for senior citizens.

III. Current Interest Rates

Investors should be aware of the prevailing interest rates when considering POMIS. As of now, the rates are as follows:

Duration (in Years)Interest Rate
15.50%
25.50%
35.50%
57.6%

IV. Details of Investment

4.1 Single Account

  • Minimum deposit: ₹1500
  • Maximum deposit: ₹4,50,000

4.2 Joint Account

  • Minimum deposit: ₹1500
  • Maximum deposit: ₹9,00,000

4.3 Minor Account

  • Minimum deposit: ₹1500
  • Maximum deposit: ₹3,00,000

4.4 Maximum Investment Limits

  • Single Account: ₹4,50,000
  • Joint Account: ₹9,00,000
  • Minor Account: ₹3,00,000

Example:

Suppose an investor deposits ₹1,00,000 for 5 years with a monthly interest rate of 6.60%. The fixed monthly income according to the POMIS scheme would be ₹550.

V. Eligibility Criteria

To avail the benefits of POMIS, individuals must meet the following eligibility criteria:

  • Citizenship: The applicant must be a citizen of India.
  • Residence: The applicant must be residing in India.
  • Age: The applicant should be at least 18 years old.
  • Minor Accounts: Accounts can be opened on behalf of minors aged 10 years or older, with access granted upon reaching the age of 18.

VI. Exclusions

POMIS is not applicable to non-resident Indians.

VII. Application Process

7.1 Offline Process

To open a POMIS account offline, follow these steps:

  1. Have a Post Office savings account.
  2. Obtain the POMIS Account application form from the Post Office or download it here.
  3. Fill and submit the form with self-attested copies of required documents at the Post Office, along with original documents for verification.
  4. Provide nominee details, including Name, DOB, and Mobile no.
  5. Make initial deposits (Minimum Rs.1000/-) via cash or cheque.

7.2 Documents Required

  • Proof of Identity: Copy of government-issued ID (Passport, Voter ID card, Driving License, Aadhaar, etc.).
  • Proof of Address: Government-issued ID or recent utility bills.
  • Passport size photographs.

Most useful other information about Post Office Monthly Income Scheme (POMIS)

FeatureInformation
Withdrawal OptionsYou can withdraw the deposited amount either from the post office or credit it to your savings account through ECS.
Withdrawal FrequencyMonthly withdrawals are possible, but you can also let some amount accumulate and withdraw it all together after a few months.
Account TransferYou can transfer your account from one post office to another for free.
Reinvestment OptionInvestors can reinvest their accumulated money at the end of the tenure.
Tax Deduction at Source (TDS)No TDS, but the interests earned are taxable.
Nomination FacilityA nominee can be appointed to receive the accumulated amount in case of the investor’s demise.
Tax BenefitsPOMIS does not offer any tax benefits under Section 80C of the Income Tax Act, 1961.
Suitability for Senior CitizensPOMIS is highly suitable for senior citizens and retired individuals.
Withdrawal FormWithdrawal forms can be obtained from the post office or downloaded from the India Post website.
Interest Post MaturityIf the amount is not withdrawn after 5 years, it continues to earn simple interest for up to 2 years based on post office savings account interest rates.

The Post Office Monthly Income Scheme stands as a secure and lucrative investment option for those seeking steady returns with minimal risk. With its government backing, attractive interest rates, and ease of operation, POMIS remains a compelling choice for both seasoned and novice investors alike.


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