Post Office Monthly Income Scheme (POMIS) is an investment scheme introduced by the Indian Postal service. This small savings scheme allows the investors to set aside a specific amount for five years investment plan. Subsequently, interest is calculated to this investment at the appropriate rate and paid out to the depositors on a monthly basis.
Post office offers monthly income schemes among a host of banking products, investment instruments and services. Since it operates under the purview of the Finance Ministry, it is highly reliable. It is a risk-averse MIS and generates a steady income every month. You can invest up to Rs 4.5 lakhs individually or up to Rs 9 lakhs jointly.
Features and benefits of the POMIS
1. As this is a government-backed scheme, your capital is protected by the government. Until maturity, your money is safe. These are also low-risk investments. Being a fixed income scheme, the money invested by borrowers is not subject to market risks and is safe.
2. The tenure for Post Office MIS comes with a lock-in period of 5 years. When the scheme matures, you can either withdraw the amount or reinvest it.
3. You can start investing with a nominal initial investment of Rs 1,500. Gradually, you can also multiply this amount.
4. Note that the returns from this investment are not inflation-beating. However, they are higher compared to other fixed-income investments like Bank Fixed Deposits. You will earn guaranteed returns in the form of interest every month.
5. Your investment does not fall under Section 80C. The income is subjected to taxation. However, it has no TDS.
6. Investors receive the payout starting from one month from making the first investment. The payouts come at the end of every month, not the beginning.
7. Investors can also open more than one account in their name. One can have multiple account ownership, but the total deposit amount cannot exceed Rs 4,50,000 in all of the accounts together.
8. Investors can also open a joint account with up to 3 people. The account belongs to all account holders equally, irrespective of who is making the contributing.
9. Investors can also start an account on behalf of a minor, aged 10 or above. The minor can avail the funds when they reach 18 years. The investment, however, cannot exceed Rs 3,00,000 in the case of a minor.
10. As the account holder, you can nominate a family member or a beneficiary, who will be able to claim the benefits and corpus in the future.
The applicant should meet the following eligibility criteria:
- The investor should be a resident Indian.
- The minimum age limit of the investor should be ten years and above ten years of age.
- The maximum fund that a minor can invest is Rs.3,00,000.
- The NRI is not eligible to invest in the Post Office Monthly Scheme.
The prescribed documents are to be furnished along with the application form.
- Identity Proof: Copy of government-issued Identity card such as Passport /PAN card/ Voter ID card / Driving License/Aadhaar, etc.
- Address Proof: Copy of government issued ID or recent utility bills.
- Photographs: Passport size photograph.
How to open MIS in the Post Office?
To open MIS in Post office the applicant has to follow the below mentioned steps.
Step 1: The applicant has to approach the nearby post office to collect the Post Office Monthly Income Scheme application form.
Step 2: Now, fill the application form with the required details while providing the nominee details.
Step 3: Submit the duly filled POMIS application form along with the required documents to the same post office.
Note: Additionally the applicant should carry the original identity proof to post office for verification purpose. Finally, you have to get a witness signature to complete the procedure and to start with the scheme.
Premature Withdrawal of the Scheme
Premature withdrawal /closure of POMIS account before maturity period (5 years) is allowed subject to following terms and conditions:
- In case of premature withdrawal between 1 to 3 years of account opening, 2% discount on deposit is applicable.
- In case of premature withdrawal between 3 to 5 years of account opening, 1% discount on deposit is applicable.
Maximum Investment Limit
As there is no fixed number of accounts held by the individual, but there is a limit on the maximum amount that can be cumulatively invested across all POMIS accounts.
- In the case of a single operating account, maximum investment allowed in POMIS is Rs.4.5 lakhs.
- In the case of joint holders (up to 3 joint holders), maximum of Rs.9 lakhs can be invested in POMIS.