The Post Office Monthly Income Scheme (POMIS) is a Government of India-backed small savings scheme. Additionally, the scheme allows the investors to set aside or save some specific amount every month. Subsequently, interest is added to this investment at the applicable rate. Furthermore, the interest is paid out to the depositor on a monthly basis.

The increasing volatility and unpredictable nature of the market have made it very risky for senior citizens to invest. Additionally, the traditional investment options offered today are not sufficient to supplement post-retirement income. Therefore, the “Post Office Monthly Income Scheme” is made keeping in mind the needs of senior citizen individuals and couples. This Government-backed scheme is very reliable savings option as an investment for senior citizens by the Post Office.

POMIS offers an attractive interest rate of 7.4 percent. Furthermore, the scheme provides monthly interest payouts to depositors, providing a steady income stream. The scheme is backed by the Ministry of Finance, the ministry also backs all the other savings portfolio options offered by Post Office. This makes the scheme a very secure investment option compared to equity shares and many fixed-income options.

Post Office Monthly Income Scheme Features :

1. Taxability: – This scheme doesn’t come under Section 80C of the Income Tax, and it is subject to taxation. Moreover, it has no TDS either.
2. Maturity Period: Effective 1st December 2011. The maturity period of the scheme is 5 years (60 months) from the account opening date. However, individuals can re-invest option
3. Payout Timing: Individuals/depositors receive payouts after one month from the initial investment, not at the beginning of every month.
4. Nomination Facility: Individuals can nominate a family member as a beneficiary for ease of claims in case of the investor’s demise. Also, the beneficiary details can be updated.
5. Account Holder: The POMIS account can be held individually or jointly, but not more than 3 adults. Furthermore, the account can be transferred from one post office to another.
6. Minimum & Maximum Deposit: The minimum limit for the amount of deposit in Post Office MIS plan is Rs. 1,000 (and thereafter in multiples of 1,000). The maximum limit for the amount of deposit in Post Office MIS plan is as follows:

Type of Account
a. Single Account – Rs. 9 Lakh
b. Joint Account – Rs. 15 Lakh
c. Minor Account – Rs. 3 Lakh

7. Bonus Option: No bonus available on accounts opened on or after 1st December 2011. Accounts opened earlier were eligible for a 5% bonus on deposit amount

Advantages Of POMIS:

1. Regular Income: The POMIS scheme is ideal for senior citizens who need predictable cash flows for daily living expenses and healthcare.
2. Government Security: This scheme is stringed with the benefit of the sovereign guarantee, i.e. this investment avenue is government-backed.
3. Attractive Interest Rate: The interest rate offered to senior citizens is much higher compared to other schemes for seniors.
4. Tax Benefits: The interest rate is taxable. However, the scheme is not applicable for tax under TDS.