Post Office Monthly Income Scheme (POMIS)

Post Office Monthly Income Scheme (POMIS) is a savings scheme backed by the government. It allows individuals to earn a monthly income and protect the principal amount. It is a low-risk investment with an interest rate of 7.4% per annum and may be suitable for conservative investors. The minimum investment amount is ₹1,000, with a maximum investment amount of ₹9 Lakh for the single account and ₹15 Lakh for the joint accounts. This article explains everything you need to know about the post office monthly income saving scheme.

What is the Post Office Monthly Income Scheme?

The post monthly income scheme is a savings scheme that helps generate regular monthly income by making uniform interest payments. It is managed by India Post and helps you invest a lump sum and then earn a monthly interest of 7.4 percent per annum. POMIS investment has a lock-in period of 5 years, after which you can withdraw the invested sum or reinvest it for another term.

Example: If an investment of ₹3 Lakh in the POMIS scheme with an interest rate of 7.4% per annum is made, then a monthly interest of approximately ₹1,850 can be availed. This will go on for 5 years, and during this period, your principal stays safe.

Features of POMIS

The features of the monthly income scheme by post office are as follows:
 

• Capital protection
  Your investment stays secure, as POMIS is backed by the Indian government. This scheme also returns your principal amount at maturity, thus making it one of the secure investment instruments.

• Fixed tenure
  The scheme has a lock-in period of 5 years from the time of opening the account. On maturity, you have the option of withdrawing your amount or extending it with the prevailing rate of interest for another period of 5 years.

• Assured returns
  POMIS provides returns, which are not affected by market fluctuations. The interest rate is set by the government on a quarterly basis to ensure constant monthly returns during the investment period.

• Flexible account openings
  You can open a single account or a joint account with a maximum of three adults. The joint accounts have high investment thresholds, which may be suitable for families who want to increase their monthly savings.

• Nomination facility
  In POMIS, the nomination facility is available, where one or more nominees can be chosen. After the death of the account holder, the nominee can easily claim the amount with minimal legal formalities.

• Multiple account ownership
  You can have multiple POMIS accounts with different post offices up to your total investment limit. This is very useful if you have investments located in different places.

• Transfer facility
  There is no charge for transferring POMIS accounts to another post office. This can be helpful, especially if you change your residence to another town or city due to a job or personal reasons.

• Auto credit option
  The interest can be credited to your post office savings account or transferred to your account through an electronic clearing service (ECS) every month. Thus, there is no need to visit a post office every month.

• No TDS deduction
  There is no tax deducted at source (TDS) on the income earned through POMIS. However, your interest income is liable to tax¹ as per your income tax rates, and you have to pay it while filing your income tax return.

• Affordable minimum investment
  The plan also enables you to begin investing ₹1,000 to a maximum of 9 Lakh for a single account and 15 Lakh for a joint account.

Advantages of Post Office Monthly Income Saving scheme

The advantages of the post office monthly income scheme are as follows:
 

• Low-risk investments
  As it is a government-supported scheme, POMIS is often considered a safe investment scheme in India. Your principal investment is secured, and returns are also guaranteed.

• Regular monthly income
  The plan includes fixed monthly interest earnings, which may act as a source of income for paying daily bills. This may be suitable for people requiring access to cash for household or personal expenses.

• Suitable for conservative investors
  POMIS may be suitable for risk-averse individuals who opt for the security of capital rather than high returns. Additionally, this may also suit people with low risk tolerance because returns are backed by the government.

• Potential returns compared to savings accounts
  The post office rate of interest for MIS is significantly higher than the interest rate provided by a savings account at the post office. Additionally, the security provided for both is almost the same.

• Suitable for retired people
  The facility to receive monthly income makes POMIS a suitable post-retirement investment scheme. Seniors can utilise their earnings to complement their pensions and maintain their standard of living without financial burden.

• Reinvestment option available
  Once the plan matures, you can reinvest it for another 5 years if you want to continue earning through it. This may be helpful if you require regular payments.

• No market-linked risks
  Unlike investments made into equities or market-linked instruments, POMIS returns stay fixed and do not fluctuate with market volatilities and inflation trends.

• Transfers of funds to RD
  You can transfer your monthly interest to a post office recurring deposit (RD) account. This enables you to generate more revenue through extra interest.

• Easy account management
  It involves very minimal paperwork, and you can manage your accounts easily. Additionally, you monitor your investments using your passbook, and facilities can be availed from any post office branch in India.

• No upper age limit
  Unlike other investment schemes, which require an upper age bracket, POMIS does not have an upper limit. This allows senior citizens and elderly persons who require safe investment opportunities to invest. 

• Transparent terms
  All terms and conditions related to the post office monthly income scheme interest rate, policy terms, and penalties are clearly specified and easily accessible. There are no hidden charges or deductions from your investment.

Eligibility criteria to open a Post Office Monthly Income Scheme account

The eligibility criteria for opening a POMIS account are as follows:
 

• Indian residency
  Only Indian residents are allowed to open a POMIS account. Non-resident Indians cannot invest in this scheme. 

• Age requirement
  Any Indian resident aged 10 years and above can open an account in POMIS. Minors who are 10 years and above can open an account in their own name, and guardians can open accounts for those who are below 10 years of age.

• Joint account holders
  Joint accounts can be opened with three adults. All joint account holders should be Indian residents. They shall hold an equal proportion of investment. However, their contributions can be different.

• Account conversion for minors
  If the minor who opened a POMIS account attains the age of 18 years, then an application must be submitted for the conversion of the account in the minor's name.

Documents required for monthly income scheme by post office

The documents required for the monthly income scheme by the post office are as follows:
 

• Identity proof
  You need to provide an identity card issued by the government, like an Aadhar Card/Passport/Voter ID/Driving Licence. 

• Address proof
  Acceptable address proof can be a recent electricity bill, water bill, or gas bill. Additionally, you can also submit a rental document, bank account statement, or any other government-issued document that proves your current address.

• Passport-sized photos
  You have to submit passport-sized photos along with your application form; ensure you carry 2-3 photos.

• Nominee details
  If you want to add a nominee, you must provide the nominee's name, date of birth, relationship with you, and their address. Signatures of the nominees will be required on the form itself.

Who should invest in POMIS?

The following individuals can consider investing in POMIS:
 

• Risk-averse investors
  Those who value capital protection over high returns can opt for POMIS. This is because it comes with a guarantee by the government that your capital will be protected while earning interest.

• Retirees and seniors
  POMIS may be suitable for retired people because they require funds every month to complement their pensions.

• Investors seeking regular income
  People who need fixed income every month for their day-to-day expenses and household requirements can consider POMIS. Fixed income is ensured in the form of interest every month.

• Investors with low risk tolerance
  Market trends may not be suitable for people who want safe investment options without market risks; they can consider POMIS because it is a secure investment option.

• First-time investors
  POMIS may be suitable for new investors entering the investment world, as it is simple with a relatively lower minimum investment. This can help build discipline and consistency.

How to start a POMIS account?

Here is how you can start a POMIS account:
 

Step 1: Open a post office savings account

First, you should go and open a post office savings account at your nearest post office if you don’t have one. This is an essential requirement before opening a POMIS account.
 

Step 2: Obtain the application form

Obtain the form for applying for POMIS from the post office counter or download it from the website of India Post, and ensure you use the latest form.
 

Step 3: Complete the form

The form has to be filled up correctly with all details, such as name, address, investment amount, type of account, whether it is single or joint, and nominee details.
 

Step 4: Gather required documents

Organise all the required documents like identity proof, address proof, passport-sized copies, and original documents for verification. Make sure that the photocopies are all clear.
 

Step 5: Submit form & deposit

The completed form and documents have to be submitted to the post office. The first deposit has to be made in cash or through a cheque. If the first deposit is made through a cheque, only then shall the date of opening of accounts be considered to be the date of realisation of the cheque.
 

Step 6: Receive account details

After your application has been processed, you will be provided with a passbook or an account statement showing your account details for your POMIS account.

Premature withdrawal rules and penalties

The following table highlights the rules and penalties for premature withdrawals:
 

To close the account before maturity, you need to submit the prescribed application form, along with your passbook, to the post office where your account exists.

POMIS Interest Rate 2025

Let’s understand the latest post office interest rate:
 

The interest rate for POMIS is set at 7.40% per annum as of 2025. The government adjusts the interest rate on a quarterly basis.

Post Office Monthly Income Scheme (POMIS) vs other saving schemes of the post office

The following table highlights the difference between POMIS and other savings schemes of the post office:
 

Please verify the latest interest rates from the official website before investing.

Conclusion

POMIS is a safe investment scheme for people who want a monthly income and protection of capital. Being an approved government scheme with guaranteed returns of 7.40%, POMIS caters to the needs of conservative investors and retirement plans of people who want stable and regular returns throughout their life. Although POMIS does not provide tax1 deductions for investments made under Section 80C of the Income Tax Act, it remains a safe investment opportunity for securing a stable financial base for individuals who want to invest for their post-retirement life.