Post Office offers POMIS among a host of banking products and
services, under the purview of the Finance Ministry. Hence, it is highly
reliable. It is a low-risk MIS and generates a steady income.
You can invest up to Rs.4.5 lakh individually or Rs. 9 lakh jointly,
and the investment period is 5 years. Capital protection is its primary
objective. For the quarter ending 30 September 2021, the interest rate
is 6.6% per annum, payable monthly.
For instance, Mr Sharma has invested Rs.4.5 lakh in the post office
monthly investment scheme for 5 years. As mentioned above, the interest
rate is 6.6% p.a. His monthly income will be Rs.2,475 for that period.
Post-maturity, he can withdraw his deposit, Rs.4.5 lakh, either from any
post office or get it transferred to his savings account via Electronic
Clearance Service. Alternatively, the account can be renewed.
Features & Benefits of Post Office Monthly Income Scheme
Capital protection: Your money is safe until maturity as this is a government-backed scheme.
Tenure:
The lock-in period for Post Office MIS is 5 years. You can withdraw the
invested amount when the scheme matures or reinvest it.
Low-risk investment: As a fixed income scheme, the money you invested is not subject to market risks and is quite safe.
Affordable deposit amount:
You can start with a nominal initial investment of Rs.1,000. As per
your affordability, you can invest in multiples of this amount.
Guaranteed returns:
You earn income in the form of interest every month. The returns are
not inflation-beating but are higher compared to other fixed-income
investments like FD.
Tax-efficiency: Your investment is not covered under Section 80C; TDS is not applicable either.
Payout: You will receive the payout after one month from making the first investment, and not the beginning of every month.
Multiple account ownership:
You can open more than one account in your name. But the total deposit
amount cannot exceed Rs.4.5 lakh in all of them together.
Joint account:
You can open a joint account with 2 or 3 people. In this case, an
aggregate sum of up to Rs.9 lakh can be invested in this account.
Fund movement: The investor can move the funds to a recurring deposit (RD) account, which is a feature Post Office has added recently.
Nominee:
The investor can nominate a beneficiary (a family member) so that they
can claim the benefits and corpus if the investor passes away during the
account’s term.
Ease of money/interest transaction: You
may collect the monthly interest directly from the post office or get
it transferred automatically to your savings account. Reinvesting the
interest in a SIP is also a lucrative option.
Reinvestment: You may reinvest the corpus post maturity in the same scheme for another block of 5 years to continue earning benefits.