Investors deposit a lump sum amount once and receive a fixed amount as interest every month for five years.
A couple can open a joint Post Office Monthly Income Scheme account. Under the current rules, the total deposits in all joint POMIS accounts taken together cannot exceed ₹15 lakh. If a couple invests the maximum ₹15 lakh, they can earn a fixed monthly income at the current interest rate of 7.4% per annum.
Here’s how the returns work:
Investment: ₹15 lakh
Annual interest: ₹1,11,000
Monthly income: ₹9,250
The interest is paid every month and can be credited to the account holder’s Post Office Savings Account or a linked bank account.
Who can open the account?
The scheme can be opened by:
Any Indian resident aged 18 years or above.
Two or three adults through a joint account.
A guardian on behalf of a minor or a person of unsound mind.
Non-Resident Indians (NRIs) are not eligible to open a new account under the scheme.
Investment limits
The minimum investment is ₹1,000, and deposits must be made in multiples of ₹1,000. The maximum investment allowed is ₹9 lakh across all single POMIS accounts held by one individual and ₹15 lakh across all joint POMIS accounts taken together.
What happens when the account matures?
The Post Office Monthly Income Scheme has a five-year tenure. Once the five years are complete, the account holder can close the account and receive the original investment amount back.
If the investor does not close the account immediately after maturity, the money will continue to earn interest. However, the interest will be paid at the Post Office Savings Account rate.
Can you withdraw the money before five years?
Yes, you can close the account before the maturity period but there are some rules.
First is the account cannot be closed within the first year after it is opened. Second, if the account is closed after one year but before three years, the Post Office will deduct 2% of the deposited amount, and the remaining money will be returned to the investor.
And third, if the account is closed after three years but before completing five years, 1% of the deposited amount will be deducted, and the remaining amount will be paid back.
