Post Office Monthly Income Scheme 2021 POMIS New Interest Rate

Post Office Monthly Income Scheme 2021 Features & New Interest Rate

Important News !! Central Government has decided to not made change in Interest Rate for POMIS Scheme for Trimester July to September 2020. Earlier Government has reduced Interest Rate for Post Office Monthly Income Scheme from 7.30% to 6.60%. Interest Rate for POMIS Scheme will be 6.60% till September 2020. Government will further decide new Interest Rate. Keep in touch with us for updates……

India post has introduced a new scheme Monthly Income Scheme. This scheme is beneficial for those who do not have any monthly income but they have capital funds. Through the Post Office Monthly Income Scheme, any person can collect the lump sum and take interest every month instead. Income will continue to be earned from this scheme and all your money will also be safe. This scheme is also known as MIS scheme. This scheme is for those individuals who have no means of monthly income. Interest is added to this investment at the applicable rate and paid out to the depositor on a monthly basis.

Post Office Monthly Income Scheme

Post Office Monthly Income Scheme

Who Should Invest in POMIS Scheme

Individuals can apply for this scheme and manage their monthly income. This Scheme is completely risk free as it is a government scheme. At the same time you also gets good interest. Monthly income scheme gives more returns than Fixed Deposit. In this scheme, the post office is paying an interest rate of around 7.5% earlier. In this scheme you can start investing by depositing a minimum of Rs 1000/- every month. This scheme is not for NRI undivided family. Minimum Amount for opening of account under MIS Scheme is in multiples of INR 1000/-.

Maximum Balance that can be retained in POMIS

There is no limit on the number of accounts held by individuals but there are limits on the maximum amount that can be cumulatively invested across all POMIS accounts which is as follows :

  • Maximum investment limit is INR 4.5 lakh in single account and INR 9 lakh in joint account.
  • An individual can invest maximum INR 4.5 lakh in MIS (including his share in joint accounts).
  • For calculation of share of an individual in joint account, each joint holder have equal share in each joint account.

Key facts of Post Office Monthly Income Scheme

  • An account can also be opened single. This account can be opened by both cash or check.
  • This account can also be transferred.
  • The account also has the facility of Nominee.
  • Any number of accounts can be opened under this scheme.
  • The account can also be opened in the name of a minor. Children above 10 years can operate their own account.
  • Joint accounts can be opened by two or three adults.
  • In lieu of the amount deposited in the Post Office Monthly Income Scheme, the installment that you receive every month reaches your account month after month. If there is no core banking facility in the branch where the monthly income plan account is open, then you have to keep a savings account in the same branch in which your installments will reach.

POMIS Account Opening Rules & Documents required

  • An account in a post office can be opened in the name of a person and not in the name of a family institution.
  • A person can open any number of accounts in his name, but the maximum balance in his monthly income plan accounts should not be more than 4.5 lakhs.
  • Under this scheme, two persons can also open a joint account. Whatever income you earn in exchange for a joint account will be shared equally between the two account holders.
  • Joint accounts can be converted to a single account at any time. Similarly, a single account can be converted into a joint account at any time.
  • To change the format of the account, both the account holders will need an application with signature.
  • Under this scheme, an account can be opened in the name of a minor or under 18 years of age.
  • The parent or legal guardian will have the right to operate the account under the age of 10 years. After passing the age of 10 years, the child can operate his own account.
  • A child of 10 years old can also open an independent account in his name.

Documents required are :

  • Identity Proof: Copy of government issued ID such as Passport/ Voter ID card/ Driving License/Aadhaar, etc.
  • Address Proof: Government issued ID or recent utility bills.
  • Photographs: Passport size photograph.

Post Office MIS Scheme Penalty Rule & Tax Rebate

Money is deposited in a monthly income plan for 5 years, but can be withdrawn before it for accidental reasons. However, some money is deducted on first withdrawal. The rules for cutting money are as follows: –

  • Money cannot be withdrawn for 1 year after opening an account.
  • If you withdraw money between 1 year and 3 years after opening the account, then 2% of the deposit will be deducted and returned.
  • Whenever you withdraw money before maturity 3 years after opening the account, then 1% of your deposit will be deducted.

MIS interest is Taxable. Under 80C of Income Tax Act, There is no relaxation in POMIS Scheme in Income Tax. However, the post office does not deduct any kind of TDS on the income generated from it.

Post Office Monthly Income Scheme Interest Rate

The Rate of interest in POMIS Account is fixed and decided by the Central Government and Finance Ministry every quarter depending on the returns yielded by Govt. bonds of the same tenure. The interest rate of POMIS for Quarter 1 Financial Year 2020- 2021 (April – June 2020) was 6.60%. Government has decided not to make change in Interest Rates thus for Quarter 2 July to September 2020 will be 6.60%.

Salient Features of POMIS Scheme

  • Account may be opened by
    (i) a single adult
    (ii) Joint Account (Maximum 3 adults)
    (iii) Minor above 10 years of age
    (iv) A guardian on behalf of a minor/Person of unsound mind.
  • Account can be opened by cash/Cheque and in case of Cheque the date of realization of Cheque in Govt. account shall be date of opening of account
  • Nomination facility is available at the time of opening and also after opening of account
  • Account can be transferred from one post office to another.
  • Any number of accounts can be opened in any post office subject to maximum investment limit by adding balance in all accounts (Rs. 4.5 Lakh)
  • Single account can be converted into Joint and Vice Versa
  • Minor after attaining majority has to apply for conversion of the account in his name
  • Maturity period is 5 years
  • Interest can be drawn through auto credit into savings account standing at same post office, orECS. In case of MIS accounts standing at CBS Post offices, monthly interest can be credited into savings account standing at any CBS Post offices
  • Can be prematurely en-cashed after one year but before 3 years at the discount of 2% of the deposit and after 3 years at the discount of 1% of the deposit. (Discount means deduction from the deposit.)
  • A bonus of 5% on principal amount is admissible on maturity in respect of MIS accounts opened on or after 8.12.07 and up to 30.11.2011. No bonus is payable on the deposits made on or after 1.12.2011
  • Interest shall be payable to the account holder on completion of a month from the date of deposit
  • If the interest payable every month is not claimed by the account holder such interest shall not earn any additional interest.

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