The Post Office Monthly Income Scheme (POMIS or Post Office MIS) is a government-backed savings scheme launched by the Post Office or India Post. Designed to provide supplementary or regular incomes from an investor's investments, the Post Office MIS caters to those who intend to park their funds in a government-run scheme, which guarantees fixed returns. If you desire to invest in Post Office monthly income schemes, you can visit any post office to do the needful. Post Office MIS assures fixed returns to investors at the rate at which the money was initially invested. The Post Office Monthly Income Scheme Calculator is used to calculate the monthly interest on investment in POMIS.
India's Post offices have a wide variety of schemes that provide fixed returns on investments. All the schemes are safe as they are government-backed. Post Office Monthly Income Scheme (Post Office MIS) is like any other scheme such as Post Office Savings Account, Post Office Recurring Deposit, and Post Office Time Deposit. The scheme's interest gets disbursed monthly, and it is identified along with being authorised by The Ministry of Finance and the Central Government. Interest rates for this scheme are announced every quarter and it depends on the returns generated by the Government Bonds of the same tenure.
Investors can opt for auto-transfer of withdrawals wherein the interest can be auto-transferred to the savings account via a Post Dated Cheque (PDC) or Electronic Clearing System (ECS). If no withdrawal or reinvestment has been done, the account will continue to earn interest at the Post Office Savings Account interest rate. Do note that there's no TDS deducted for the interest earned, but the earned interest is taxable in the hands of the investor.
Computing the interest earned from a Post Office Monthly Income Scheme is extremely easy. Using the formula, anyone can effortlessly calculate the interest income. However, to make it even more easy and swift, the online Post Office Monthly Income Scheme Calculator also uses the same formula for determining the results: POMIS Monthly Interest = Amount Invested * Annual Interest Rate/12
Using Fintra's Post Office Monthly Income Scheme Calculator, one can calculate the Monthly Interest immediately. The Post Office MIS interest rate calculator requires the input of the following details to accurately calculate the results:
When all data has been filled in into the MIS calculator, click on “Submit” and instantly the results are displayed beside the calculator.
Following are some of the benefits of using Fintra's Post Office Monthly Income Scheme Calculator:
Following are some of the benefits of the Post Office Monthly Income Scheme Calculator:
Determining the monthly interest: The MIS calculator assists in determining the monthly interest an investor can earn if invested in POMIS.
Financial planning: Using the calculator, an investor can plan their investments. Through the results availed from the MIS interest rate calculator, they can use it to compare with other monthly income schemes. Also, by estimating their interest amount, they can plan out their budgets effectively.
Easy to use: The calculator is extremely easy and simple to use. One has to simply enter their investment amount along with the current interest rate, and then the calculator displays the monthly interest the investor can earn from the investment within seconds.
Accessible and accurate: Being fast, reliable, and available online, the calculator can be accessed from anywhere, anytime.
Saves time: The MIS Calculator provides results within seconds and hence saves the time of the investor.
It's very easy and hassle-free to open a Post Office MIS account. You can open a POMIS account only at a post office.
However, one does need to have a Post Office Savings Account before opening a POMIS account. If you already have a Post Office Savings Account, you can then follow the below procedures to open a POMIS account.
When visiting the post office, collect and fill out the application form and submit all the required documents. Following is an outline of the things one will require to open a POMIS account:
Step by Step processes of opening a POMIS account
Interest distribution on the investment amount will be one month from the account opening date. Additionally, you need to get the signatures of a witness or a nominee(s) on the form.
The key features of the Post Office MIS scheme are:
a. For a Single Account, the maximum limit is Rs. 4.5 Lakh
b. For Joint Accounts, the maximum limit is Rs. 9 Lakh
c. For Minor Account, the maximum limit is Rs. 3 Lakh
Post Office MIS investment returns aren't market-linked. Since it is backed by the government, MIS offers guaranteed returns. The scheme is a good option for numerous conservative investors. Following are the two vital benefits of opening a Post Office MIS account:
Steady Returns: Post Office Monthly Income Schemes provide fixed interest income. Investors can earn a steady and fixed flow of income every month.
Reinvestment: Post Office MIS interest income is known to be a good source of additional monthly income. You can collect the interest directly from the post office and/or transfer it to your savings account. Investors can also choose to reinvest the monthly income.
Reinvesting as a SIP in either equity mutual funds or other asset class mutual funds will indeed help the money grow. However, this reinvestment into mutual funds is suited only when you understand and are willing to undertake the risk associated. Moreover, a post office recurring deposit is another option which you can use to invest monthly interest.
Upon maturity, you also may choose to reinvest the corpus in the same scheme for another five years to get double the benefits.
The following are the eligibility criteria for those who are seeking to avail this scheme-
To withdraw the deposited amount from the account, you can either visit the nearest post office or get it credited into your savings account through ECS (Electronic Clearing System). If the amount hasn't been withdrawn or reinvested, the account can continue to earn interest up to 2 years from maturity at the Post Office Savings Account rate.
There is no TDS (Tax Deduction at Source) for interest one earns in Post Office MIS. However, the investments in the Post Office Monthly Income Scheme don't qualify for tax savings under Section 80C of the Income Tax Act.
Senior citizens can invest in Post Office MIS, have a POMIS account, and earn a monthly interest higher than the regular Post Office MIS interest rates.
You can transfer Post Office MIS Account from one post office to another for absolutely free. In order to do this, you've to fill up the transfer application form, Form SB 10 (b), and it can be available at any Post Office. The form can also be downloaded online. Investors have to fill up the form with the basic details such as POMIS account number, branch, bank details like bank account number, ifsc code, etc., and signatures of the account holders. Later on, the passbook along with the form has to be submitted. The Postal Assistant (PA) in the existing branch will provide the acknowledgement slip and forward it to the post office in the new location where you desire to transfer the account. The same slip has also to be presented to the PA of the branch where the account has to be transferred. Then you will get the new passbook with the old balance.
Premature withdrawals are allowed only after one year from the account opening. However, there's a penalty for the same, and the penalty depends on the time left until maturity. For example, if the premature withdrawal is made after one year of the account opening but before three years, then, the penalty would be around 2%. If the premature withdrawal is made after three years and before five years (maturity), then around 1% penalty is levied.
The scheme does allow to select and appoint a nominee against the account who will receive the accumulated amount in case of unfortunate demise.
Post Office MIS does not provide any tax benefits under Section 80C of the Income Tax Act, 1961.
Your money is safe in the post office investment scheme. In fact, mostly all the Post office schemes do guarantee good returns as the Government of India backs them. Moreover, some post office investment schemes even offer tax benefits up to Rs 1,50,000 upon investment under Section 80C of the Income Tax Act 1961.
The answer is no. One can't take a loan against its Post Office MIS investments.
Some other types of accounts that can be opened with the post office or India Post are as follows:
All the above Post Office Schemes (India Post schemes) are investment plans that have varying maturity periods and lock-ins. In general, the maturity periods range from 5 years to 18 years. However, all of them do guarantee good returns. Do bear in mind that the tax treatment for each of the above mentioned investment plans is also different. Fintra has online calculators for some of the above post office schemes. To name a few, there's the RD calculator (Recurring Deposit Calculator), PPF calculator (Public Provident Fund), Sukanya Samriddhi Yojana (SSY) Calculator, and National Savings Certificate (NSC) Calculator. Anyone can use them to determine the maturity value of the investments in any of the above schemes.