Post Office Monthly Income Scheme (POMIS) – How it works and Rules

Are you looking for a safe option to invest your money and earn decent returns? If yes, then can explore one of the post office schemes. Today, we look at post office monthly income schemes (POMIS) which are not that well-known among urban investors. We often look to fixed deposits and other debt options  to park our money or generated monthly income. But the monthly income scheme post office offers myriad possibilities. Lets explore!

Post Office Monthly Income Account

Post Office Monthly Income Scheme is one of the post office schemes which gives you a guaranteed return on your investment. Anyone who wants to generate a monthly income can open this account and get an assured monthly income.You get 8% interest per year, which is payable on per month basis. You will get the interest each month from the date of making the investment, not from start of the month.

For example : Ajay invests Rs 4.5 lacs in the post office monthly income scheme. His interest per year is Rs 36,000 @8%, hence he gets Rs 3,000 per month as income. If you do not withdraw the amount for some month, it would not earn any interest and just lie in the account.

This post office saving scheme does not come under sec 80C so there is no tax-exemption for the amount you invest in this, and interest income is taxable, but there is no TDS cut in this scheme. Read 7 Tax saving Tips

You can deposit the money in the POMIS with cash, demand draft or local cheque. Once you open a monthly income scheme account, you will be issued a scheme certificate and a passbook to record the transactions against the post office MIS scheme.  The maturity period of this scheme is 6 years. You will also be eligible for a 5% bonus if you retain your scheme foe 6 years, so eventually your overall return including this bonus can turn out to be around 8.9% .  There is a limit on the amount you can invest in POMIS. It’s limited to Rs 4.5 lacs for a single account and 9 lacs for a joint account. You can have any number of accounts, but within the overall upper limit.  There is no compulsion to take your money out after maturity, you can leave the money in the account, but then it would earn the interest equal to saving bank account for next 2 years only.

Getting Interest income in your Saving account

You get withdraw POMIS income amount by directly going to the Post-office. However, there seems to be a bit of confusion,  if you want the income in your saving bank account. According to per some resources, you can get it credited to your savings bank account,  provided its in the same post-office. But elsewhere, some guys confirm that you can provide ECS information at the time of opening the account and get the interest amount created in your Bank account (see the list of cities covered by Post-office) . I found the comment below on this website, where a user claims of using ECS .

YES! you can opt for a ECS facility whereby your monthly interest amount will be credited to any savings account of your choice (here HDFC). After you open the POMIS account, you need to fill up the ECS form, attach a blank cheque of your HDFC savings account and you’re all set. You don’t need to open a Savings account at the Post office just for credit of monthly interest.

The information I’ve given here is authentic, because I’m personally using the ECS facility.

Pre-mature Withdrawal from Post-Office monthly Saving Scheme

Even though the maturity period for POMIS is 6 yrs , there is facility to break it and take your money out. However you can take your money only after 1 year. You have to pay some penalty which is as follows

  • If you break it within 1-3 yrs : 2% penalty on Deposit amount
  • If you break it after 3 yrs : 1% penalty on Deposit amount

Example : If you deposit Rs 1 lac in  POMIS , and want to take money out in 2nd year,  you will have to bear the penalty of 2,000 and you will get back 98,000. If you take money out in 5th year, you get 99,000.

Confusion of returns by mixing POMIS along with RD ?

There are some claims which says one can invest the monthly income coming from Post office monthly income scheme in to the Post office RD and earn a return of 10.5% . This at first looks amazing , but its kind of untrue and marketing gimmick . I did a XIRR analysis of the whole cash flows and found out that considering everything , your final and actual return is just 8.77% , which means that when you invest your money in POMIS , direct all the monthly income to an RD and at the end when you get the maturity amount along with the bonus of 5% , in total you have made an annual return of just 8.77%, which is quite ok considering the safety and conservativeness of the product. But consideing the tax to be paid at the end of the tenure , again you might not get great Real Returns ! , Remember that the RD comes for the 5 yrs , but it can be extended for 1 more year and it can be made for 6 yrs .

Returns from POMIS + RD

However the Post office website claims that you earn 10.5% when you put your monthly income into an RD, which is just to attract investors and not give a complete picture . This 10.5% figure is actually only after considering the bonus amount you get at the end, If you remove the Bonus of 5% from the scene , then the return drops to 7.92% . In the below example , you can see that a person who has invested Rs 1,20,000 will get Rs 800 as monthly income , and he gets 72808 as maturity amount from RD , 1,20,000 back as the initial investment and 6,000 as bonus amount .

Scene 1 : If you consider the 800 payment per month in RD for 6 yrs and the maturity amount of 72,806 at the end of 6 yrs , then the returns are just 7.92% (XIRR)

Scene 2 : If you consider scene 1 along with the Bonus amount also , which means you get 72,806 + 6,000 Bonus also = Rs 78,806 , in that case your returns are 10.32% , but its misleading as this bonus is the cost of your 1,20,000 getting stuck at one place for 6 yrs and not an RD feature . So this is not the right way of looking at it . (See chart above)

In case of scene 2 into consideration , then the return from “Only POMIS” is just 8% , but if you consider POMIS + Bonus only then its 8.91% .

Note that this setup operates automatically, you have to set up this once and then no more overseeing. It will happen automatically each month (official link)

Other Features of Post Office Monthly Income Scheme

  • A minor above age 10 years  can open an account on his/her own name directly. There is a limit of 3 lacs for guardian and it would not be clubbed with guardian limit (More on Clubbing rules)
  • Non-Resident Indian / HUF cannot open the Account.
  • Interest not withdrawn does not carry any interest.
  • You POMIS account can be transferred  from one post office to any Post office in India free of cost.
  • The amount deposited in POMIS is exempt from Wealth Tax

Nomination

You have to make the nomination for your Post office monthly Income scheme at the time of applying, however if you don’t do it at the time of opening, you can also do the nomination later. Incase of the death of account holder the money will be paid to the nominee.  Read more on nomination here.

288 CommentsAdd Comment

  1. Jayaprakash Kanreddy

    Nice information about POMIS. I knew about it but RD point was new to me.
    RD with 10.5% is worth considering, it looks much better than PPF in this case, isn’t it?

    • Smart Singh

      Hi Jayaprakash,
      The after-tax return would be lower than PPF. And note that 10.5% is only available on the RD of interest, not the original deposit. Hence the effective interest rate would be closer to 8%, not 10.5%.

      • Smart

        hmm.. I verified it using the XIRR tool in excel . when a person redirects all the interest to RD , with the maturity amount he gets at the end + bonus , it turns out to be 10.60% interest overall . Have a look at the graph I have added back to the article .

        Manish

  2. Jig

    Every where NRI’s treat really like Non Indians… though providing boost to the overall economy in worst scenario like 2008. what do you say?

  3. Mani

    As usual, Once again a good post Manish….

    I know about the POMIS but on the RD its a news to me… if you can please clarify my point on interest rate earned, you said 10.5% on the RD that means, on POMIS 8% + RD 10.5% (Annaully….)

    @ Hemant – Can you please elaborate on which SIP, is that on the MF’s or in Post office itself…

    Tks & Rgds,

    • Mani

      Look at the article again , I have added teh chart . I verified it using the XIRR tool in excel . when a person redirects all the interest to RD , with the maturity amount he gets at the end + bonus , it turns out to be 10.60% interest overall . Have a look at the graph I have added back to the article .

      Manish

      • You have mentioned the amount got on maturity of RD is 72806. It is actually Rs. 728.90 per Rs. 10 (invested for 5 years). The calculator at projects a 6-year RD rate (which doesn’t exist really, you get to choose a 5 yr. RD and can only extend that by blocks of 5 years — see .

        • suganthi

          padmanbhan
          In post office RD is 5yrs Rd and 10 yrs RD
          only 3 yrs lockin period after 3yrs if you discontinue only SB interest 4%
          After 5 to 10 yrs you can close the account any time

    • Venshu

      @ Mani, I think what Hemant means is that one should invest in POMIS and then re-invest the monthly income from the POMIS through SIP in a good Mutual Fund to enhance the returns. This way, the capital which is invested in POMIS stays secure and only the monthly incoome gets invested in the market (preferably a goood equity MF).

  4. Mukesh Agarwal

    Hi Manish

    The RD which you had mentioned is 5 Years, but it actually for 6 years. Because MIS is for 6 years, so RD will continue for 6 years which gives 10.94% approx.. Second, i dont think that MIS intrest will transfered to HDFC SB through all postoffice as they dont have any internet facility. As much as i know for transfer you have to open Saving Bank account at the same post office not even in another postoffice of the same city.
    Link-

    Mukesh
    Hare Krishna

  5. 10.5% is the attempt by India Post at marketing gimmicks. [To compete with the gimmicks of private players? :-)]

    One could calculate the IRR for the POMIS+RD arrangement, and it should come out somewhere between 7.5% & 8%. [I’m too lazy & tired to do so myself now. :-)]

    The funda is this: When your money rests with the POMIS it earns 8%, and when it goes into the RD it earns 7.5%. Compare it with a cumulative FD at X%. The principal earns interest at X% and the interest earns further interest at X% so the yield is X%. The POMIS+RD arrangement is similar except that the principal earns 8% and the interest earns 7.5%, so the final yield would between the two (pre-tax).

    Note that both POMIS and RD interests are taxable so the yield will get reduced accordingly. Also note that the POMIS bonus and the quirks of RD formula* would slightly increase the yield.

    [* in case one is interested, the quirk of RD formula is thus: If one makes an investment every quarter all with the same maturity date, each of the principals will be compounded for an integral number of quarters. However with RD there is a funda of compounding for fractions of quarters, e.g. the first monthly installment gets compounded 20 & two-thirds times, the second gets compounded 20 & one-thirds times, the third 20 times, the fourth 19 2/3 times, etc. Check ou t the formula at

  6. Jagadees

    @Manish
    Nice post. Its understandable that the interest earned on POMIS scheme will earn 10.75% in RD.(But slightly confusing the readers that if we invest in POMIS scheme and choose RD, in total the proceeds will earn 10.75% interest). As SmartSingh mentioned deposits at best will earn 8.8%. I guess it will be good if you include a sample calculation as given in india post calculator to clarify the doubt.

    Regards
    Jagadees

  7. Krish

    Last year I made an investment in POMIS for my parents. At that time banks interest rate were around 6-7% which made POMIS attractive.

    The scenario is changed in Jan’11. SBI is offering 8.75 rate upto 10 years. HDFC bank is giving 9% for 2+ years and looks to me that all bank deposit rates are much higher than POMIS. To me in the changed environment, it does not make any compelling reason to invest in POMIS. The banks like HDFC also ready to give out interest money on monthly basis. That too they credit to your account and you can withdraw using ATM card whenever you want.

    • sudhahar

      Dear,

      The Bank will deduct 10 % TDS straightly on the Interest earned on any FDs and if you don’t provide PAN, the TDS will be 20 %.

      Thanks & Regards,
      Sudhahar R

  8. Sanghmitra

    Hi Manish,

    Is there any minimum limit for investing in POMIS.
    Whether it can be done with lumpsum one-time amount in a year or like a SIP?
    Considering the city change, how i can manage the account?

  9. manish

    Hi Manish,

    Thank you again for a very nicely written article on POMIS…As we know the interest on POMIS is taxable.Kindly let me know how much tax I would pay taking the same example above

    thanks

  10. lakshman

    The XIRR calculation is fallacious in the article.
    The calculation in the article assumes that one invests 800/- every month.
    But that is really not the case. We invest at the beginning and keep quiet and take back the returns at end of 6th year. The movement of money from POMIS to rd happens automatically and should not find an entry in our xirr calcluation!

    Here are the inputs for xirr calculation!

    1-Jan-01 -120000
    1-Jan-07 192806 (=1,20,000 + 72806 (RD proceeds) + 5% bonux from MIS)
    XIRR = 8.2200053

    • Lakshman

      Its not fallacious , I am only considering the part where you calculate the returns out of RD and bonus, so if you invest 1,20,000 in POMIS ,you get 800 per month ,now thats going to RD , so eventually it was your money which you are investing in RD and then some maturity value is coming out of it + BONUS ,the chart shows only that part and it turns out to be 10.60% , and yes I agree that its not the right figure , because it includes BONUS value ,without Bonus value it will be somewhere around 7.9%

      What you said at the end that we just pay 1,20,000 in start and get 1,98806 total at the end is the actualy RIGHT picture and the absolute returns out of the whole situation ,but its coming to be 8.77% for me . Not 8.22% , check again

      manish

  11. Mukesh Agarwal

    Hi Manish & All Members

    One more thing i want to say that POMIS is good as comapred to NSC, if anyone wants to invest over 1,00,000 u/s 80c for saving Tax. POMIS gives better return than NSC. Below is a comparing chart between POMIS & NSC.

    6 YearsPOMIS+RD 6 Years NSC

    Sum Assured(A) 1,00,000 1,00,000
    Monthly Interest 667 _
    M.V Of R.D of 6yrs (b) 60,702 _
    5% Bonus on SA (c) 5,000 _
    Total ( b + c = D) 65,702 _

    After 6 Years Total (A+D) 1,65,702 1,60,100
    No TDS No TDS
    So its better to invest in POMIS which gives you Rs 5,702 more than NSC on 1 Lakhs, And Rs 25,659 upto 4.5 Lakhs. Isin’t It ?

    NOTE- investment upto rs 1 lakhs is good in NSC as it saves tax u/s 80c but after that limit intrest earned on NSC is Taxable. So why not to choose POMIS ?

    Mukesh
    Hare Krishna

  12. Hello Mansih,

    Good information like always. Just want to add my 2 cents here. ECS facility for direct credit of interest of MIS is currently available only in 36 locations of post office and not throughout in India. One can check these locations through official website of Indian Post office at

  13. Pankaj Vasudeo

    Hi Manish , nice article as usual
    POMIS gives 8% return and Senior Citizens Savings Scheme (SCSS) gives 9% return
    so please give ur sight on that one too.
    what if we combine SCSS with RD so that we can generate 1% extra return?

  14. Mohinder Bisht

    Dear Manish,
    Thanks for all I know about investments through your blog/site. This link given below gives where ECS is available for Indian postal departments. I have few quires about my investment and Portfolio but first I would like to learn more so I could ask right question to you.

    Thanks
    Mohinder bidht

      • Sir please help us we I m syed yusuf are have fixed deposit in post office MIS for one year but now just complete 2,month sir now we are urgentlly need amount but in in post office say its not possible you wait 8 months your period is completed than you take sir god promise we are not wait one month also because very very need so can you give me any suggestions and help us

        • You can withdraw it only after 1 yr is completed , not before that , this is the rule of POMIS !

          Pre-mature Withdrawal from Post-Office monthly Saving Scheme

          Even though the maturity period for POMIS is 6 yrs , there is facility to break it and take your money out. However you can take your money only after 1 year. You have to pay some penalty which is as follows

          If you break it within 1-3 yrs : 2% penalty on Deposit amount
          If you break it after 3 yrs : 1% penalty on Deposit amount

          Example : If you deposit Rs 1 lac in POMIS , and want to take money out in 2nd year, you will have to bear the penalty of 2,000 and you will get back 98,000. If you take money out in 5th year, you get 99,000.

  15. VISALAKSHI S

    Regarding crediting of MIS interest to SB accounts in post offices,I have had bad experience,they just do not give any regular interest credit in SB account for the balance amount .If any one knows the rules about Interest Payment To SB Accounts in Post Offices,kindly let me know ? It is better to avail ECS facility and get the interest credit to any Bank.

  16. ramesh

    hello, nice site
    can you tell me the folowing.
    1. i opened an RD account in the year 2000, and continue to pay the monthly amount of 500 regularly, even after maturity i continue to do so till now. now from march onwards if i stop what happens if i keep the amount without withdrawing tilll another 5 yr?
    do i get any interest?
    if so at what rate?
    or is it beter to withdraw and open MIS seperately linked to RD?
    can you explain?
    regards

  17. aruna

    MIS talks of joint investment upto 9lakhs what happens in event of demise ofone of the jointholder if this amt has been invested already ===can a fresh joint holder be added to this existing mis a/c

    • Aruna

      If one of the depositors of an MIS account dies, the account will be treated as a single account in the name of the surviving depositor from the date of death of the said depositor. When a report to this effect is received in the post office, the Postmaster will ask the surviving depositor to withdraw the excess amount in excess of the limit prescribed for a single depositor (Rs 4.5 lakh) and this excess amount will not carry interest from the date of death of the joint depositor. The interest already paid on this excess amount will be recovered or adjusted.

      A small care has to be taken. The surviving single account holder should effect a nomination as soon as possible.

      • Akshay

        Hi Manish,

        Just a tweak to aruna’s example.
        My uncle was having an MIS account with deposit of 3lac with his wife as a nominee. He used to withdraw the interwst money in every 3-4 months.

        Uncle died last year in April 2010. Aunty , got to know of the account and had taken time to collect the documents like death certificate n all and gone to post office in in May 2011 to inform Post office as well as to withdraw interest (2000 per month ) from post office. Still they gave her the interest money and told her some procedurs needs to be done to close the acount. (uncle had last withdrawn the interest accrued in March2010 )

        Now, in september 2011, she requestd for MIS account closure, then they asked her to return the interest from April 2011 till september 2011 .
        1) If they were not supposed to give the interest then why did they give in the first place in May 2011? ..
        Post office people state that they came to know about uncle’s death in Sept 2011, only

        2) Now aunty had given the interest back to them, is she eligible to get atleast the basic interest of saving bank account from April 2010 till September 2011. Since the deposit money of 3laC (April 2010 – Sept 2011) as well as the interest of 2000 rs (April2010 – May2011 = 14* 2000 = 28000) was with Post office only.

        Please excuse for the length of the question.
        Thanks,
        Akshay

        • Akshay

          Hi Manish,

          A small correction to the previous post,

          When Aunty requestd for MIS account closure, then Pos office people asked her to return the interest from April 2010 till september 2011
          (not from April 2011)

          Thanks ,
          Ashay

  18. ansh

    i have one doubt please clarify it.i would to invest in POMIS.

    if invest 100,000 for 6 yrs on that i will get montly income but at the maurity period whether i get my full principal amt with bonus or not.

    • Ansh

      Yes you will get monthly interest and you will also get maturity amount along with 5% bonus.
      So in your case, if you deposit Rs. 100000 for 6 years you will get Rs 800 per month and at maturity you will get Rs 105000.


      Jagoinvestor Team

      • I.N.Mukherjee

        Whether monthly interest paid in POMIS is taxable?Whether there is any TDS?What is the rate/amount of income tax one has to pay on maturity of such MIS ,say for a principal amount of Rs.10000/-?

  19. ansh

    i have a little confusion about principal amt. could you plz let me know whether i will get my whole principal amt on maturity period or not. Say by investment of 1,20,000 in POMIS for 6 yrs. on this i will get my monthly interest. but at maturity period how much i get.

  20. shahnawaz

    just visited your page for the first time, and let me tell you it is realllly interesting and informative. i’ll search for all materials that interest me. good work, thanks a lot.

  21. Dr Adesh

    Manish,
    very nicely presented matter and most important, very informative.
    1) I would like ask one thing after reading this article that whether one should invest in POMIS with RD or FDs.
    2) I came to know that we don’t have any taxation on POMIS…is it right?
    Hoping for ur great response.

    Adesh

    • Dr Adesh

      1) where to invest ? It totally depends on what you want, you know what is FD , its locking thing , its return , its risk and same for POMIS , now what is it that you want ? POMIS will lock in your money

      2) Who said that , POMIS interest is full taxable .

      Manish

  22. satish kumar

    its a nice article . is there any more scheme or plan that can attract my intention because i already knew about it.

  23. VJ

    Hi Manish
    One important query and help, Is it possible for the post office RD account, every month the amount can get auto credited from the post office SB account…

    Thanks

  24. Swapan Sen

    My MIS will mature shortly with 10% bonus. I have been paying Tax on the interests I have been getting. Will the bonus be taxable at the applicable rate for me. My highest slab of tax at present is 30%. Is there a way I can save tax on this bonus?

  25. pooja

    Hi, I want to invest 4 to 5 lac per year in post office or any other monthly scheme. I want very good monthly return.
    pls guide me

    • Pooja

      If you want a fixed and secure return , then you can get average returns only , not “good” or “great” returnrs . for that you need to invest in MIP or something else

      Manish

  26. pooja desai

    hello

    I want to know that i am having 100000 to invest, no. of years is unlimited as i am 32 yeras and i want monthly return from this money.
    So how much i will get as monthly return..please suggest

  27. smith sudhakar

    If your intention is to make your money grow, then probably KVP is a better option than going for POMIS + RD.

  28. Amit Tiwari

    Hi,

    Govt recently change the POMIS interest rate from 8% to 8.2% and discontinue the 5% bonus.
    My question is which scheme is better, new one or old. from which i will get the more return?

  29. Rohit Garg

    Hey Manish

    Read you blog for the first time today, and I must tell you, its just great !

    keep writing and keep helping us :)

    And, I assure you, I will pass on this information to others as well!

  30. Jit

    Govt increases the interest rate from 8% to 8.2% but scraps the 5% bonus on maturity. Also it states that rate notification will be from Dec-1 and the MIS of old schemes maturing after Dec-1 won’t get the 5% or 10% maturity bonus? Is this true? If yes then we should take forward it; how can govt not increasing the interest rate of our savings from the date of invested even not giving a single penny of increased interest rate rather they are snatching the maturity bonus (5% or 10% of old schemes) from us if the maturity date falls after 1-Dec.

    • Jit

      As far as I know , the new rates and scrapping of Bonus is applicable only for new accounts . Any old account will get all those benefits which was mentioned before . Where did the info that old accounts will also not get BONUS ?

      Manish

      • Jit

        Manish;

        Here is the extract of an article published in Times Of India which states that:
        “There are some disappointments as well. The government is withdrawing Kisan Vikas Patra, on suspicion that this is being used for money laundering. It has also decided to do away with the 5% bonus that MIS customers got at the time of maturity. What is even more disappointing is that this withdrawal of bonus payout will be applicable even on old accounts that remain operational on or after December 1. ”

        The link is:
        http://timesofindia.indiatimes.com/business/india-business/Now-get-more-on-small-savings/articleshow/10913006.cms

        Please clarify on this.
        Jit

        • Jit

          As far as we know also that anything new should be applicable on new items only and old schemes would be in tact as it offered earlier till its maturity. But if this is the case of hampering old ones too as per claim made by Times of India’s article then don’t you think investor are going to lose a large chunk of their waited bonus.

          Jit

          • Jit

            Yes .. but if at the time of taking the product , it was mentioned that the govt rules can change and the rules at the time of maturity will apply , then you cant do anything

            Manish

          • Jit

            Manish

            I gone through the official notification on MIS by MoF; it states that
            ” There shall be no bonus admissible on maturity in the accounts opened on or after 1-12-2011″

            So how come this is possible as per Times Of India article to curtail the bonus on existing accounts maturing after 1-12-2011.

  31. Akshay

    Hi Manish,

    Gone through your blog, its very good and informative.
    Please revert on my query. Thanks in advance.

    My uncle was having an MIS account with deposit of 3lac with his wife as a nominee. He used to withdraw the interwst money in every 3-4 months.

    Uncle died last year in April 2010. Aunty , got to know of the account and had taken time to collect the documents like death certificate n all and gone to post office in in May 2011 to inform Post office as well as to withdraw interest (2000 per month ) from post office. Still they gave her the interest money and told her some procedurs needs to be done to close the acount. (uncle had last withdrawn the interest accrued in March2010 )

    Now, in september 2011, she requestd for MIS account closure, then they asked her to return the interest from April 2010 till september 2011 .
    1) If they were not supposed to give the interest then why did they give in the first place in May 2011? ..
    Post office people state that they came to know about uncle’s death in Sept 2011, only

    2) Now aunty had given the interest back to them, is she eligible to get atleast the basic interest of saving bank account from April 2010 till September 2011. Since the deposit money of 3laC (April 2010 – Sept 2011) as well as the interest of 2000 rs (April2010 – May2011 = 14* 2000 = 28000) was with Post office only.

    Please excuse for the length of the question.
    Thanks,
    Akshay

    • Krish

      @ Akshay

      Recently we faced similar situation like yours. This is what we have learnt. When a person is died, there should not be any interest withdrawls from the account henceforth. No one else is supposed to operate the account. Once the death certificate is submitted, PO has to cancel the account and refund the amount to the nominee. PO would investigate the nominee claim and verifies the death certificate through investigation. It takes about 2 months. Once it makes sure everything in order, the principal and interest (from date of death to cancellation date) would be refunded to the nominee.

      • Akshay

        Krish,

        Does that mean that The Nominee will receive the interest (standard 2000 rs @ 8% or @ savings bank account rate(example 3- 4%) ) for the period from date of death to cancellation date
        i.e. Will my aunty eligible to get the interest from April 2010 – September 2011
        (SOme post office people are only suggesting that you file a complaint against this, you should get atleast the interest @ savings bank account rate.

        Please clarify and tell the actual amount of interest for amount deposited of 3lac .

        Thanks a lot
        Akshay

        • Krish

          Your aunt should receive Rs.2000 a month from Apr’10 to the refund date along with a principal. In our case, PO paid it like that (8%). I don’t see any reason why PO should deny the interest or pay less interest if person is not alive but money is with them.

  32. Rahul

    Dear Manish,

    I want to know how to invest in PPF – On monthly basis or yearly.If yearly when it has to be deposited to earn maximum interest.I have opened PPF account just one month back.

    Please suggest.

    Regards
    Rahul

  33. dipti ganguly

    MIS means monthly income scheme,but till today ie 6 2 2012 the interest has not been credited to my s/s a/c.It will take another 2 or 3 days which has been informed by the po authority,when it was enquired. I do not like to complain but sorry to say service should be improved immediatelly.

  34. Rana kedar

    Dear sir, i am planing to invest 8 to 10 lack in post office monthly income plane, how much money i will get every month ??? or where should i invest in monthly income plane????

  35. Rana kedar

    Dear sir, i am planing to invest 8 to 10 lack in post office monthly income plane, how much money i will get every month ??? or where should i invest in monthly income plane?

  36. Pradeep Kumar

    thnks frnd this is realy good information about mis and to reinvest the interest in RD further …………….

  37. sahaj

    hello all

    Going through a tough time as my father expired last month…my father had 3 FD accounts for the POMIS of Rs 3 lakh each…all 3 are joint accounts…2 in name of my mom-dad with my name as nominee,,and one joint in name of dad-me n mom as nominee….Date of deposit 12-5-08,,dateof maturity 12-5-14….same in all 3 FDs…….I want to know is it necessary to close these joint FD accounts prematurely??One thing more,,the saving account passbooks of post office in which the Monthly income/interestRs 2000 from each FD was deposited dont mention any nominee name??will the nominees of these saving accounts be same as FDs???plzz advise…i shall be highly obliged….thnxx in anticipation

    • Sahaj

      No its not neccessary to close down those FD’s , because its on joint name , so the other person is now the main person who can manage those FD;s . the FD nominee’s can be different than the saving bank account . Check the saving bank data

      Manish

  38. Girish

    Girish, Dt 17th march 2012
    from the above articles many of my confusion have been cleared. Pl let me , which is more beneficial, whether to keep money in G.P.F account or to withdraw the money from G.P.F account and then invest it in POMIS and P.O saving account.

  39. Girish

    Thanks , Manish. Please also tell me about some best available monthly income schemes of different banks, which are similar to POMIS. Also clarify the investment limit of those schemes, rate of interest given by the banks and TDS deducted from the interest.

    • Girish

      The only comparable things like that is Bank FD with monthly or quarterly interest nothing else. MIP mutual funds with divident options also are one of the option !

  40. Ptm

    is there any check point between all POST offices that in one name maximum limit 4.5 lacs only allowed?

    i mean: imaging one guy opened PO MIS in mumbai post office 4.5 lacs

    & he also later open another PO MIS in pune or delhi post office for another 4.5 lacs…

    is there any cross checking there existing?

  41. PTNM

    Dear Manish,

    How NRE can invest in this scheme? What kind of documents has to be submitted while opening this account?

  42. saras kempraj

    The info. you provide is of great help to senior citizens. Is it possible to get back the investment done on 11th may 2011, fifteen days prior to the year, as we need the money urgently.
    Thank you
    regards

  43. srinivas

    The interest rates have changed recently.
    MIS – 8.50% per annum w.e.f. 01.04.2012 and no Bonus
    RD – 8.4% per annum

    Thanks

  44. BHAG SINGH

    I want know regarding payment of bonus on POMIS. I had taken POMIS by depositing a sum of Rs. 200000/- in May-2006, which is going to mature after completing 6 year of term by 1st. June,2012. Let me know if any bonus is payable to with principle amount.

  45. Krishna Chaitanya

    Glad to see this blog, with a very good option(MIS) which I never heard before.
    I have been brosing websites for 3 weeks to invest my 1.5Lac rupees. excuse me if that is too long to think for investing 1.5lac of money. But I am looking for 0 risk investment.
    I have already started small RD with 3000 and a 5000 for 27 month period @ 9.25% with HDFC.
    Also I have a PPF account started this January. I am already exhausted at 80C section. So took infrastructure bond last year and planning one for this fiscal too.

    I have been thinking of Fixed deposit(1 -1.5L) with HDFC/ICICI or NSC and now MIS.

    It would be really wonderful if you can guide my investment as my brain is already storming with what to do. 1.5L have been sitting in my SB account for more than 2 months now. I actually do not need that now. As myself and wife are working and earn monthly around 60,000. So we would save further with our monthly salaries and would look in similar way(as per your answer for this question) for future investments too.

    So can you please guide where to invest MIS/FD/NSC.
    a. FD I have looked/liked is HDFC @9.25% compounded quarterly for 1year 16 days. I would reinvest the capital after maturity in same or similary FD. (interest gained would be put into PPF)

    b. NSC VII issues @ 8.60%

    c. NSC IX issue @ 8.90%

    d. MIS @ 8.50%

    Please post with maturity value, monthily/quarterly/annual interest accrued as applicable. I would file 15H for FD so no TDS. Please provide amount(figures) for each of these. Also it would be great if you can provide me link for XIRR excel sheeet, I would like to experiment with that too.

    Thanks in Advance and looking for your reply.

      • Krishna Chaitanya

        thanks Manish for a very quick reply.
        And after your comment, I was not yet fully satisfied(Sorry). So was still browsing and surprisingly again landed in this jagoinvestor website only.. :)
        this time your PPF column.

        Actually I was calculating different ways, how much interest I would acrue.

        for 1,50,000 investment:
        HDFC FD 6M1D @ 7.75% = 5902
        HDFC FD 12M16D @9.25%=15030
        HDFC FD 6M1D @7.75%=5902 ; reinvest including interest again for 6M1D@7.75%=6134

        MIS @9.50% 5 yrs = 1061 p.month, 12741p.annum, 63706 for 5 yrs

        NSC @8.60% 5yrs = 78525 for 5 yrs

        Of all these cases, HDFC FD 12M16D is more efficient as year end yield is higher compared to any other.

        But interest received is not of my more interest. So was checking where I could invest the interest accrued. There I reached to PPF.
        Hence if I invest 15030 per annum into PPF, I receive much lesser than investing interest 1061 (from MIS per month) every month into PPF.
        Where PPF is considered to e 8.6%.

        My 1,50,000 would still be continued/re-invested in MIS/FD whichever case you advise.

        your inputs are appreciable. And please let me know if I can share your link in Facebook. It is really a useful link.

        • I think you are complicating the situation beyond the limit , The difference in two options is very small to work so hard :) . Why do you want to reinvest your interest part somewhere else ? Just choose the interest cumulative option in the FD itself .

    • deba

      Tell me 5% bonus begins in which time? Also tell me that when I commence the MIS 2010 then bonus was guaranteed @ 8%, so tel me that in that case whether I will eligible for bonus @8% ?.

  46. Sonal J Desai

    Dear Sir,

    I have invested Rs 2,10,000/- in MIS post office. How can we calculate with RD + Bonus. Please give me exact answer with calculation

  47. bala

    can i invest 4.5 lakhs in secunderabad post office, another 4.5 lakhs in delhi and another 4.5 in chennai. whats stopping ?

  48. manish

    Dear manish i m getting 72358 rs as maturity in case of rd excluding the bonus will u plz tell where i am going wrong?

  49. Savita

    Hi Manishji,

    I am planning for go for POMIS so plz guide me for more safe saving shall I direct my interest in RD or not..??? I have account in SBI and already have RD account of 1500 pm for 1 year..Also please guide me for PPF saving . my monthly income is 25 k in hand…Please guide me safe saving I will v very much thankful to you..you can mail me at savisingh_80@yahoo.com

  50. Pavi

    Hello,
    I have question:

    I have MIS account with amount of 300000 and it’s completed with 2years. Now I have plan to break the deposit and also didn’t took any interest till date.
    So how much Money I will going to get now, if I break my MIS account?

  51. sowrabh

    Sir, My mother opened two MIS accounts with a total amount of 9 lakhs and both accounts are of joint accounts naming me and my mother. Sir, she expired recently. Sir, does there will be any problem withdrawing the amount on maturity for me, if so, what is the way to withdraw on maturity because the amount deposited is for joint holders.

  52. Rajanna K V

    Dear Mr.Manish,
    I read your answers for people’s questions & noted that, for post office MIS there is no bonus payable for accounts opened even before this budget also. But, in the circular released by Govt. of India on 24.1.2011 clearly mentioned in clause 1(iii) that, ”there shall no bonus admissible on maturity in the accounts opened on or after 01.12.2011.”
    This means for the accounts opened before 01.12.2011 this bonus should be applicable I mean. I have post office MIS opened jointly with my wife for 9 Lacs opened on 31.12.2009. Can you clarify this matter.

    Rgds,
    Rajanna K V.

  53. G.D.Karode

    I had invest money on 12.04.2006 for next 6 years and closed my mis in the month of may-2012, so should i get bonus or not ? Kindly advice us.

  54. Maneesh Arora

    Hello sir,

    Im little bit confused,as u knw tht now stock market are up..and i have invested Rs4lacs in mutul funds, I want to knw should i take out my money from mutual funds and invest in POMIS along with RD.Pls guide me sir,i will be very thankful to u.

  55. priyank saluja

    year 2006 se 2008 k bich me kya govt ne bonus 5% pomis scheme se withdraw kr liy tha kya pls check kar ke bta skte hai humare agent ka khna h ki govt ne circular issue kiya tha is period me nd bonus withdraw kar liya tha tha.

  56. DARA

    Dear Manish,

    Under Monthly Income Scheme if Mr. A & Mr.X had opened MIP of Rs.10000/- maturing in 01/10/12 and Mr. X & Mrs. X had opened MIP of Rs.600000/- which matured prior to Dec’11. Mr. &Mrs. X could withdraw the funds on maturity but when Mr. A wants to withdraw Rs. 10000/- in Oct’12. Maturity amount is held back saying investment of Mr.X has exceeded its limit of Rs. 300000/-. Since Mr. X is common investor, can both MIP be combined to check the maximum limit of Rs.300000/-. If so, then what is a remedy to collect the maturity amount? or what is a penalty to come out of this situation?

    Dara

  57. biplab bhattacharjee

    My uncle had opened an m.i.s. on 6.3.07 for 6 yrs. He was getting Rs.2813 per month
    in a quarterly basis. But surprisingly, when he went to draw his 3rd quarter interest in
    Sep.’12 the post office said that you will not gets any interest henceforth, because your
    tenure is complete. Then he asked that i have took the m.i.s. for 6 yrs how it comes close? they replied that as per new circular the M.I.S. will be for 5 yrs. and those who opened for 6 yrs. will be closed after completion of 5 yrs. Now, let me know that is it true, if it is true than from when the circular comes in force.

  58. Sheldon

    Thanks for such a informative page. My question is very hypothetical , hope you will answer it.

    If I want to get about 10,000 rs monthly just by investing my money in Bank schemes, how much money will I need to invest. Also which schemes will best suite my requirement.

  59. Nilesh

    Hello Mr. Chauhan,

    I have gone through several posts about POMIS and found that yours is an excellent one!

    I have a unique requirement and I need your suggestion about it.

    I want to invest Rs. 15 lakh every month. Therefore, at the end of a year, my total investment will be Rs. 180 lakhs.

    I want monthly income and from the safest sources only. I think the best options would be either POMIS or FD accounts.

    I do not want to pay tax/TDS etc. What is the best option for me?

    Thanks in advance.
    Nilesh

    • Nilesh

      The first thing is where ever you invest, if the interest crosses your limit like 2 lac per year, you will have to pay tax ,there is no way you can avoid that

      Now coming to POMIS , there is a limit of investing upto 15 lacs in POMIS, so you cant invest more than that

      • Nilesh

        Hello Manish,
        As you told me, there is a limit of Rs. 15 lakh in POMIS. Can I open more than one account in POMIS, I think I can open any number of acount. So are you saying that my aggregate of all POMIS should not proceed 15 lakh ?

        I have the same question about fixed deposit.May I open more than one fixed deposite account with same name in same branch? Or may I able to add more deposits in the previous ly opened FD account?

        In both cases, POMIS as well as FD, my question is that if I want to add some amount, say 10-15 lakh every month, what is the best option? Am I able to open another account or add it in existing account?
        Thanks.

  60. HARISH TIWARI

    Sir my father and mother invested 4 lakh amount 3 years back in post office MIS plan at Utterpradesh post office Now my father expired and I want to transfer all account to mumbai post office. Will it possible and what is the procedure ?

  61. vivek garg

    Dear manishji I invested Rs.300000 in MIS in 12-04-2007, and on maturity I didn’t get any bonus as told by PO, sir I want to know the actual period when bonus is withdrawan (is it between 01-01-2006 to 31-12-2007). Further I want to know that if I reinvest this amount should I m eligible for bonus or not, kindly guide.

  62. raj

    manish i want to know that interest of my mis can be directly deposit to my canara bank. and for this what are the formalities

  63. Jaideep Banerjee

    Hi Manish, This post is certainly the best place to know more about POMIS. Appreciate your efforts of answering all the questions. I have read through all the questions and got most of my doubts clear. Yet I want to confirm once more on the bonus as I am planning to invest more on POMIS.

    I opened the MIS acct on Oct 2010 maturing in Oct 2015 – Will I get bonus ?
    If I open a new MIS as on date will I get bonus ?

    Thanks
    Jaideep

  64. sowrabh

    Sir, My mother has opened two joint accounts with a total amount of 675000 and 225000. The joint names are my mother and me. She gave the nomination of my father. Sir, she expired two years ago. Should we inform about this to the Post Office. Or there may problem while closing the accounts, Plz suggest. Thnx.

  65. Manohar

    Sir… According to me FD is better than POMIS, coz in FD we get 9.25% for 5 to 10yrs in SBI. and if i choose for 1 yr term it increase to 9.50%.
    so is’t right according to me plz help me in this. is’t I want to deposit in BANK or Post office

  66. k.c.pandey

    Dear sir, I invested Rs-9,00000 on 4-10-2011 for M.I.S. as a senior citizen, the interest of which was used on recurring deposit.what will be the total amount I will be getting after maturity. can this amount be extended for six year & what will be the total amount I will be getting on maturity.

  67. SG

    Hello Everbody,
    Apologise at the outset as my comment is going to be rather long – but I can assure you it would be informative to some.

    I came across this page while surfing to find whether a MIS started by my father, due to mature this month is eligible for bonus or not. I appreciate the effort put by Manish and all other contributors to let others know their point of view or the information that they have themselves. Unfortunately, however, I could not find the answer to my question here – or rather I wasn’t wholly satisfied by the answer I found here. My simple point of view was (and I am sure everyone would agree) that if someone invests in a government scheme being aware that on maturity he/she is entitled to a bonus of X%, the government CANNOT unilateraly change the act at a later date, so as to deny the bonus to that person. In any case, POMIS does not issue a legal policy kind of document that details all the terms and conditions. All you get is a standard post office pass book and the terms are understood to be as per the applicable act/scheme issued by the finance ministry at that point of time. Therefore, not paying the bonus to someone who invested, after being told that there would be a bonus, should be construed as a fraud on the part of the government – and regardless of the rampant corruption in government offices that we all know of, I don’t think the Indian government would commit such blatant fraud.

    The conviction, however, led me to do more research (read surfing), speak to some acquaintances and also a visit to the local post office (to speak to the staff – who simply said that bonus is no longer paid). I could not find a straight answer from anyone, but based on all the research, here is my take on this entire issue of bonus applicable on POMIS. I sincerely hope this post would help a few people at least.

    (A) – Prior to 13 Feb 2006 (not sure since when – but it is immaterial now as all such accounts have matured by Feb 2012) the bonus paid on POMIS was 10%.
    (B) – Between 13 Feb 2006 and 7 Dec 2007, government withdrew bonus from POMIS.
    (C) – The bonus was re-introduced effective on 8 Dec 2007 but was reduced to 5%. This continued till 30 Nov 2011.
    (D) – Since 1 Dec 2011, no bonus is payable on maturity of POMIS and also the maturity period was reduced from 6 years to 5 years.

    This is the history. As I understand therefore, for all MIS maturing between 12 Feb 2012 and 6 Dec 2013 (category B) no bonus would be payable, as these accounts were initiated when the prevailing finance act did not guarantee any bonus (unfortunately, my father’s MIS falls in this category).

    However, accounts maturing between 7 Dec 2013 and 29 Nov 2017 should get a bonus @5% if they fall in category C.
    It should be noted that there is a maturity overlap between category C & D as the tenure was reduced to 5 years for category D. Therefore, if your POMIS matures between 30 Nov 2016 and 29 Nov 2017, whether or not you would be eligible for bonus would depend on when you opened the account (category C or D).

    I think that this is how it should be and how it is. The reason, not even the PO folks know about this is probably due to the “funny” coincidence that immediately after the latest act was notified (Dec 2011), the schemes that started maturing were those in category B (maturing since Feb 2012), leading to the misunderstanding amongst all (including the staff of various post offices – who should have known better) that bonus is no longer payable. It is my firm belief that after 7 Dec 2013 we will hear that bonus is being paid again!! Would like to hear a confirmation from someone on this site in 2 months time.
    And going by the difficulty I faced in this little research of mine, there would be absolute confusion in the post offices across India between Dec 2016 and Nov 2017 – for reasons I have explained above.

    Regards,

    SG

  68. Hi sir

    I am 31 yr old and working in corporate and have planned to start my own business.But before starting my business i want to play safe so have decided to invest a half money in POMIS so that monthly income of nearly 10000Rs is fixed.Can you please guide me is it good or some other better options are available for investing such huge money.Pls guide me asap.

  69. sanjay kumar

    Can U please tell can I invest in post office monthly income scheme for my son as i have already taken for me and my wife.

  70. Karthikeyan

    Manish, this is a nice article clearly describing what POMIS scheme is all about. My question is given that there is no tax advantage, the interest rate is only 8.40%, and the max. investment amount is 9 lakhs (Rs. 6,300 monthly interest), isn’t it better for someone interested in generating monthly income from their savings to go with traditional FDs instead? The interest rates are higher at 9% and SBI is offering this rate up to 10 years.

    • Yes, you can surely do that – Its not just about returns, but at times convenience and structure. Someone who has better access to post offices and wants a income on regular basis might prefer POMIS , we living in cities might assume that post offices are not the best choice, but still in smaller places and villages, post offices are very much sought after :)

      Manish

  71. ganesh

    sir..ihave not paid the amount for the past six months in RECURRING DEPOSIT account at the post office…………..do i need to follow any extra procedure to get my account back to normalcy???????/…kindly reply me sir!!!!!!!!!!!!

  72. bhaskar chakrabarty

    My POMIS is maturing next month, i.e. August, 2014. Can I get the bonus and how much if I invest Rs. 4.50 lakhs ? What is the procedure to discontinue the scheme ? Thanks.

  73. Suraj sharma

    Respected Manish sir,

    I have invested 450000 on my account in MIS scheme and 900000 as a joint account in MIS in August2013. both’s intrest I am utilising ti RD per month in same post office. Then pls tell me how much intrest I am getting individually on MIS and RD per month?!(I would like to know current intrest rates on MIS and RD individually per month)

  74. Priyanka

    Hi Sir

    I have opened an MIS account in my hometown. I stay 4 hrs. away from my hometown and need to close it. Do I need to be present in-person to close the account? I have nominated my father as a beneficiary/nominee in the account opening form. Would that be okay if he signs on the premature account closing form?

    Please advice.

    Thanks in advance,
    Priyanka J

  75. Mamatha

    Sir i want to save money of my grand parents(age-above70).Which one is best for senior citizens….MIS or FD with the banks but i want the facility to take out the money at any time.

  76. Sarang

    Hi manish,
    I got little bit confused after reading this article.
    Because I had invested 90K in POMIS & then transferred monthly interest to RD. after 5 years ( MIS & RD rate was 8% & 7.5% resp)
    total amount i rcvd was 43734. without bonus
    it means i got 9.71% of interest.
    In current scenario ( MIS & RD rate is 8.4% for both ) so same amount will fetch arnd 10.4% of interest if put it as a MIS & RD
    correct me if I am wrong ( all calculations without bonus )

  77. sanjay kumar

    sir, mene 2013 me 1500rs RD par monthly karwai hai 5 Saalon ke liye postoffice se kya aap batayenge ki last me mujhe kitne rupees milenge,,,,,,,,plz
    thankyou sir ji.

  78. Rahul Bahl

    Hi Manish,
    My dad (retired for 6 years) had opened an POMIS account post his retirement and chose to invest the interest income in RD.
    This year he has received the RD amount along with the applicable interest. He hasn’t shown the RD (basically the monthly return from FD) in his annual income for the previous years as it was within the applicable limits and it was the only source of income for him
    My question is : As the RD amount has matured in this year, is it advisable for us to file returns for the previous years now and show the respective interest income (RD) for the years (as showcasing the entire income (RD+Interest) as the current year’s income would make it taxable). Pl advise.

  79. iyer

    my father died in April 2015 and his MIS matures in June 2015. I am the nominee. if I submit a claim in May 2015 will I lose the 5% bonus on maturity? if I submit the claim on maturity in June 2015 will I get interest for May, June and also maturity bonus? please reply ASAP.

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