The Post Office Monthly Income Scheme (MIS / POMIS) is among India’s most reliable, government-backed investment plans for those seeking regular, low-risk income. Especially in times of market volatility, MIS appeals to retirees, homemakers, and any investor who values safety and predictability.
What Is the Post Office Monthly Income Scheme?
MIS (also called POMIS) allows you to deposit a lump sum and receive fixed monthly interest payments. It is open to resident Indians, including individuals, joint accounts, and trust accounts. Most importantly, the scheme is 100% backed by the Government of India, which ensures capital security.
Since January 1, 2025, the interest rate on MIS is 7.40% per annum, paid out monthly.
Key Features & Rules
| Feature | Details |
|---|---|
| Interest rate (2025-26) | 7.40% p.a., payable monthly |
| Minimum deposit | ₹1,000 (in multiples of ₹1,000) |
| Maximum investment | Single account: ₹9,00,000 Joint account (max 3 adults): ₹15,00,000 |
| Tenure / Lock-in | 5 years (cannot withdraw principal before maturity) |
| Premature withdrawal / penalty | Withdrawal allowed after 1 year, but with penalty (e.g. 2% if within 1–3 years) |
| Transferability | Can be transferred from one post office to another anywhere in India |
| Account types / eligibility | Single, joint (up to 3 adults), minor (above 10 years) |
| Nomination facility | Available at opening or later |
| TDS / Tax | Interest is fully taxable (added to your income), but no TDS is deducted at source from MIS interest |
How Monthly Income Works (Example)
Suppose you deposit ₹5,00,000 in MIS at 7.40% p.a.:
- Annual interest = ₹5,00,000 × 7.40% = ₹37,000
- Monthly interest payout ≈ ₹37,000 ÷ 12 = ₹3,083
You’ll receive this amount each month for 5 years. At the end of the 5 years, the principal (₹5,00,000) is returned to you.
For a full ₹9,00,000 investment:
- Annual interest = 9,00,000 × 7.40% = ₹66,600
- Monthly income = ₹66,600 ÷ 12 = ₹5,550
These payouts help in planning your monthly budgeting reliably.
Why MIS Is Attractive
- Capital safety: Backed by central government guarantee
- Fixed monthly income: Useful for pensioners, homemakers, or those without steady cash flows
- Simplicity & accessibility: Available at almost every post office, with minimal paperwork
- Moderate investment size: Even small investors can participate
- Transferability: Easy to move accounts if you relocate
Things to Watch / Limitations
- The principal is locked in for 5 years—no liquidity
- Interest is subject to regular income tax (no tax exemption)
- You must plan well for tax implications since there’s no TDS withheld, but the interest is taxable anyway
- The government can change interest rates every quarter (though they often keep them stable)
Who Should Consider MIS?
Ideal candidates include:
- Retirees and senior citizens (though they might also consider schemes like SCSS)
- Homemakers or dependents needing a steady monthly income
- Conservative investors who avoid market-linked instruments
- Anyone wanting a predictable, regular cash flow
If someone is more growth- or tax-oriented, they may combine MIS with other instruments.
How to Open a MIS Account
- Visit your nearest Post Office (any with CBS facility preferred).
- Fill out the MIS form (available at the counter).
- Submit KYC documents: identity proof, address proof, photographs.
- Deposit the principal amount via cash, cheque, or bank transfer.
- You can nominate beneficiaries.
- For interest payout, you can choose to collect interest from the post office, or opt for auto-credit into a savings account via ECS / electronic transfer (if supported)
Once open, monthly credits begin one month after account start.
MIS vs Other Post Office Schemes (2025 Snapshot)
| Scheme | Interest Rate* | Income Payment Frequency | Major Benefits / Notes |
|---|---|---|---|
| MIS / POMIS | 7.40% p.a. | Monthly | Best for regular income, but locked 5 years |
| Time Deposit (5 years) | 7.50% p.a. | Annually or at maturity | Higher return but no monthly payouts |
| Recurring Deposit (5 years) | 6.7% p.a. | Quarterly compounding | For disciplined monthly savings |
| Senior Citizens Savings Scheme (SCSS) | 8.20% p.a. | Quarterly | Very good yield for seniors with gov guarantee |
Rates as of latest official notifications; always confirm with your post office.
Summary
The Post Office MIS is a solid choice for anyone who prioritizes safety, certainty, and steady income over high returns or liquidity. At 7.40% p.a., it gives a dependable monthly payout, making it especially suitable for retirees, homemakers, and conservative investors. While it has the downside of a 5-year lock-in and taxable interest, its ease, accessibility, and government backing make it one of the most dependable income-oriented investment options in India.