The Post Office Monthly Income Scheme (POMIS) is the best choice if you’re seeking for an investment option that offers dependable supplementary income, has a government-backed guarantee, and is risk-free.

What is Post Office Monthly Income Scheme (POMIS)?

One of the most well-liked risk-free post office savings plans is the Post Office Monthly Income Scheme (POMIS), where an investor can invest with a Rs.1,000 minimum deposit.

The plan successfully converts the meagre monthly funds into profitable investments. For investors who are risk-averse and desire a fixed monthly income, this scheme is a fantastic low-risk solution.

It provides interest payments each month as a return to its investors. The Department of Post (DoP) or Indian Post offers it. The interest rate for the current quarter of the post office monthly income programme is 6.6%.

It has a five-year lock-in period, and the interest rate on the Post Office Monthly Income Scheme will not vary during the investment time. Meaning that the Post Office Monthly Income Scheme’s return is guaranteed and that an investor will receive a return on their investment at the rate of interest applicable at the time of their investment.

The interest sum is paid to you on a monthly basis in the form of a pension. This programme is designed exclusively for retirees and senior folks whose monthly income has dried up. When a savings plan matures, one has the choice of either withdrawing or reinvesting the money.The monthly interest on investments in POMIS can be calculated using the Post office Swp calculator.

How to open a POMIS Account?

It’s not as difficult as you would imagine to open a POMIS account. Please take a look at the step-by-step process rather than envisioning lengthy lines and even longer paperwork.

● Pick up an application for POMIS at the post office.
● At the post office, turn in the properly completed form, a photocopy of your ID, residential documentation, and two passport-size pictures. Carry the originals with you for confirmation.
● Obtain the witness’s or nominees’ signatures on the form.
● Pay the down payment in cash or by check. A post-dated check will have the account opening date as the date printed on it.
● The Post Office executive will give you the specifics of your newly opened account once the processing is complete.

The following papers are required in order to open a POMIS account:

● Identity documents include Aadhar, PAN, a driver’s licence, a passport, and a voter ID
● Address Verification: Passport, utility bills, bank statements, aadhar cards, etc.
● Two passport-sized photos

Eligibility for Post Office Monthly Income Scheme:

● Only Indian citizens are eligible to open POMIS accounts.
● NRIs cannot profit from this programme.
● Accounts can be opened by any adult.
● Anyone 10 years of age or older can open an account on behalf of a minor. When kids turn 18 years old, they can use the money.
● A minor must request conversion of the account in his name after reaching majority.

Benefits of Post Office Monthly Income Scheme

● Capital protection: Because this is a government-backed programme, your money is secure until it matures.

● Reinvestment: The earnings from POMIS accounts may be reinvested in other securities such as equity shares or SIPs. However, because they include market risk, senior citizens can avoid them. Reinvesting the proceeds in a Post Office Recurring Deposit Account is a wise decision.

● Payment: Rather than at the start of each month, you will receive the payout one month after making the initial investment.

● Senior citizen investment option: Investing in POMIS offers a regular rate of return without any market concerns, as opposed to having idle lump money. For elderly investors, this lower-risk investment with a fixed interest rate is ideal.
● Joint account: Two or three individuals may open a joint account. In this situation, a total amount of up to Rs. 9 lakh may be deposited into this account.

● Ease of money/interest transfer: You have the option of getting your savings to account automatically credited with the monthly interest from the post office. Reinvesting the interest in a SIP can be quite profitable.

● No Tax Deducted at Source is deducted from the interest amount in a POMIS account (TDS).
● If the investor does not take the money after the 5-year maturity period, he will continue to make simple interest payments for up to another 2-year period.
● Low-risk monthly income plan through the post office MIS is a secure avenue for investment. The guarantees come in the form of regular income distributions. It also offers a risk-free investment option.
● From one post office to another, a transferable POMIS account may be used.
● Auto-interest withdrawal
The investor has the option to automatically transfer the interest to a savings account using Post Dated Cheques (PDC) and the Electronic Clearing System (ECS)

Restrictions of Post Office Monthly Income Scheme:

According to the following manner and circumstances, POMIS accounts may be prematurely withdrawn from or closed before the maturity period of five years:

● A 2% “deduction on deposit” is payable in the event of an early withdrawal within 1 to 3 years of account opening.

● Premature withdrawals made within three to five years after account opening are subject to a 1% deduction from deposit.

Comparing POMIS with other monthly income schemes:



Mutual Fund

Income Insurance

A guaranteed monthly income of 6.60 percent per year is promised by a post office investment scheme.


TDS is not relevant. Contrarily, interest is subject to taxation.


The investor can free the funds after the one-year locking period, but only after paying a penalty of 1-2 percent.

A debt-oriented mutual fund that holds debt instruments in a 20:80 ratio to stocks




TDS is not applicable.



Investors who cash out their units within a year of investing must pay a 1% exit charge.

Under this kind of retirement plan, annuities are paid to the insured in the form of monthly income.



Taxes apply to the monthly annuity.



Due to the long investment tenure associated with this long-term plan, the insured will be responsible for paying surrender fees if the money is withdrawn before the policy term has run its course.


To meet the various needs of various investors, Indian Post provides a variety of investment alternatives. All Post Office Savings Plans offer returns since the Indian government supports them. Investors who want a predictable monthly income but don’t want to take any risks with their investments might consider the Post Office Monthly Income Scheme. As a result, it is more advantageous for seniors or retired people.

CA Mukesh Gupta
CA Mukesh Gupta
Mukesh Gupta is the founder and director of Wealthcare. He is Fellow chartered accountant, Certified Financial Planner and Certified Public Financial advisor. He is in financial services industry since 1994. He conducts free money management sessions for corporates and associations on topics related to Personal finance. His previous engagement was with Birla Sunlife group. He regularly writes on topics related to Personal finance and occasionally appear on electronic media.

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