Post Office MIS : The search for investment options that provide security as well as good returns is still a difficult one for most Indians in today’s unstable financial environment.
In such a scenario, the Post Office Monthly Income Scheme (POMIS) comes as a ray of hope, offering the much needed financial security by way of regular income from an investment that is completely risk-free and investible (official word!) and guaranteed by the government.
The annual interest rate of 7.4% serves as a draw for anyone looking for a stable monthly income.
Why is Post Office MIS the Ideal Income Provider?
The Post Office Monthly Income Scheme is simple and safe. Being a reliable, government-backed savings plan, POMIS provides a predictable monthly income at a lucrative 7.40% p.a.
interest. This programme is a part of the prestigious India Post which is one of the oldest institutions working as a financial service provider in India.
For investors on the lookout for a bigger passive income stream, the POMIS is likely to fetch a little more than 1 lakh annually depending on the right investment amount.
You can earn huge income with the highest investment limits, to generate a comfortable financial cushion, and aspire for a content lifestyle, without the stress of market-linked investments.
What Will Be Your Monthly Income from POMIS?
Here is the maths of the Monthly Income Scheme It is simple and done in the best way possible. The monthly interest calculation is based on easy math: Monthly Interest = (Amount that is Invested x Annual Interest Rate) / 12. So, what are we looking at when it comes to potential earnings?
After investing ₹ 9 lakh (upper limit in single account): Around ₹ 5,550 p.m.
-For Joint account with max investment of ₹15 lakhs you can get around ₹9,250 per month.
– An amount of ₹1 lakh can fetch over ₹5.5 lakh in interest for individual deposits in a period of 5 years
In the context of these persons being close to the market and still investing the maximum of ₹15 lakh in a joint account and churning the screeners will throw a healthy addition to your other sources of income, in excess of ₹1.11 lakh per annum.
Key features that set POMIS apart
Uncertain Times, Guaranteed Returns
At a time when market linked investments are on a roller coaster, POMIS provides steady returns, with a fixed interest rate of 7.40% p.a., ensuring a stable source of income month after month unimpacted by market upheaval.
This certainty is priceless for financial planning, particularly by retirees and others who rely on a regular stream of income.
Security Government-Backed
India Post Monthly Income Scheme is a safe scheme and very famous in India as it is a government-backed scheme and one of the best options for a regular income with security.
This backing of the Centre removes any apprehension regarding safety of funds, thus making POMIS one of the safest investment products.
Flexible Account Options
Investor types The scheme is easy for all kinds of investors:
Single Account holders with investment of upto ₹9 lakhs
Joint accounts (up to three individuals) with investment caps of up to ₹15 lakh
Accounts for 10 year old and above minors
Accounts in the name of Guardian for minors under the age 10, unsound mind persons
Reasonable Lock-in Period
POMIS has 5 years lock-in period which is neither too high nor too low, it’s sweet spot to approve the commitment. Premature withdrawal isn’t allowed before one year, and is permitted with a penalty post one year—2% of the Principal for 1-3 Years, 1% for 3-5 Years.
This plan is structured so as not to limit flexibility, while still encouraging disciplined saving.
Who Must Invest in Post Office MIS?
Post Office Monthly Income Scheme is good for:
1. Retirees are going for financial freedom
For those who are retired or between jobs, POMIS becomes a source of regular income that ensures financial self sufficiency.
This scheme would be less of a concern for senior citizens at retirement, thus facilitating a stable income base. Although there is a special Senior Citizens Savings Scheme that offers 8.2% interest, POMIS is still a good supplement.
2. Risk-Averse Investors
If you lose sleep over market volatility, POMIS can help you sleep with its assured returns. It’s ideal for conservative investors who value capital preservation over aggressive growth, as a middle-of-the-road option between low-returning savings accounts and high-risk equity investments.
3. Income Supplementers
POMIS can be used to make a side income for working individuals who want to start outside income streams. The interest payment received each month can be allocated to a variety of financial objectives—be it accumulating an emergency fund, or underwriting annual family vacations.
4. Family Financial Planners
POMIS works well for the parents investing for their children’s education or any other family goal. Minors 10 years of age and older can open their own accounts while adults may open accounts in names of younger family members; becoming a means of comprehensive family financial planning.
How to Increase Your Earnings on POMIS
Here are some strategies to maximize from the Post Office Monthly Income Scheme:
2 Add several account configurations
Investment can be done on a per person basis, with individual investment capped at ₹ 9 lakh, or you can maximize your family’s returns creating multiple account structures:
Separate accounts for each qualified family member
Share accounts with various family members combined Options Resolver
Minors Unification of separate accounts held by minors Cost Controls Optional bulk management of family accounts by members of various ages 5.少量帳戶統整方案 6.
This method can increase your family’s monthly income from POMIS in multiples.
Ladder Your Investments
Instead of investing the entire amount at first, you may create an investment ladder by opening multiple MIS accounts at different points of time. This strategy provides:
Consistent maturity profile to help manage reinvestment risk
– The ability to vary the investment amount with the changes in the interest rates
Improved liquidity profile with ladder maturities
Reinvest Monthly Interest
You either invest the monthly interest for higher interest earning securities or deposit the money into a Recurring Deposit. This form of compounding turns your regular earnings into a growth investment that could grow your investment faster.
The Easy Way to open POMIS Account
The process of opening a Post Office Monthly Income Scheme account is a simple one. You must first have a Post Office Savings Account. Next, Obtain the POMIS application form from your nearest post office, complete it and attach the necessary documents to be submitted.
Required Documents
Bring along:
ID Proof (Aadhaar, Voter-Id, Passport, etc.)
-Proof of Address (recent utility bills, Passport, PAN card, etc.)
Passport-sized photographs
Value of the first investment (cash or cheque)
Online Access
At India Post, customers can check their account balance online through internet banking service. For availing net banking, customer should have an active individual or joint account with correct KYC documents, and have an active DOP ATM card.
And this electronic convenience lets you watch your investments from afar.
Tax Implications of POMIS
Please note that POMIS does not offer tax benefits under section 80C of the Income Tax Act. The scheme is taxable and does not offer TDS (Tax Deducted at Source) benefit. This means:
–Interest is fully taxable as per your income tax slab.
You need to declare POMIS interest in your yearly tax return
There is no incremental tax benefit on investing in this scheme
Although there are no tax benefits, the etc’s appealing interest rate coupled with the government support, often trumps tax factors for most investors.
How does POMIS compares with other investments?
To give you a perspective, below is comparison of POMIS against other standard investment choices –
POMIS vs Bank Fixed Deposits
Most bank FDs pay between 5% and 6.5% interest; POMIS provides a far better 7.4% without any appreciable variation in risk.
The monthly payout feature of POMIS makes it better if you are looking for regular income as compared to the usual quarterly or cumulative interest options in bank FDs.
POMIS Vs Senior Citizens Savings Scheme (SCSS)
SCSS has a little better interest rate of 8.2% but has i rigid age restriction. Senior citizen saving scheme (SCSS) is limited to people over 60 years of age, whereas POMIS is open to any adult citizen.
For senior citizens who have already reached the maximum SCSS limit (₹30 lakh) of investment, POMIS is a good supplementary investment.
POMIS compared to Market-linked Investments
Unlike mutual funds or stocks–which are subject to market risk–POMIS provides an assured return independent of market movements.
While returns in the open market may be higher in bullish periods, in a scheme like POMIS it’s predictable and definitely without the roller coaster like movements associated with equity markets, which has a value in itself especially when there is a down trend in the eco system.
Example: Retirement Planning through POMIS
Mr. Sharma deposited ₹9 lakh in POMIS for 5 years. At the current interest rate @ 7.40 p.a., he gets ₹5,550 as monthly pension. On maturity, he can get his ₹9 lakh back along with the gross interest.
The steady flow of income is making it easier for Mr. Sharma to enjoy his retired life without tapping into the corpus.
Case Example: Income to Survive in the Family
One such family of four (husband, wife and two adult children), led by their santrader, planned multiple POMIS accounts (individual and joint) in a way to invest as much as possible within legitimate range.
By pooling ₹36 lakh in multiple account combos, they make more than ₹22,000 a month which is sizeable family income and can finance their household expenses.
Maximising Your Post Office MIS investment
To take full advantage of the rewards of POMIS, try the following simple tips:
1. Automate Your Interest Accruals
Put a standing instruction to automatically transfer the monthly interest to your savings or recurring deposit account. Such automation can help in saving in a disciplined way and accidental spendings of interest income.
2. Reinvestment at Maturity Included in the Plan
If you don’t withdraw the interest accruing to your MIS account after the dates of maturity (that is, the completion of 5 years), you can earn simple interest for an additional 2 years as per the interest rate declared for a post office savings account. But, reinvesting the same in a new POMIS account will be more beneficial as the old account offered higher interest.
Diversify Amongst Post Office Schemes
Though POMIS is great as a way to get income on a monthly basis, go across other Post Office schemes for a diversified portfolio:
Public Provident Fund(PPF) for EEE tax efficient long term saving option
Kisan Vikas Patra (KVP) for medium term investment
Sukanya Samriddhi Yojana (SSY) for girl child future, etc., 60 to 20 years or the age.http://amcalculator.com/ iNdExSSY for girl child future, etc., 60 to 20 years or the age.
This provides a broad spectrum of financial safety, across different time horizons.
Redefining Financial Security with POMIS
In a scenario as unpredictable as current financial markets, a Post Office Monthly Income Scheme is a perfect port in the storm for income-seeking investors.
With an alluring rate of interest of 7.4 per cent, government support and regular monthly income, you can earn more than 1 lakh per annum through your investment in POMIS, when invested correctly.
Retirment, additional income source and another investment avenue or whatever are all your requirements, You should consider as a serious option to have in your investment bucket, POMIS.
By strategically maximizing your investment limits and complementing them with other financial products, you can effectively build a strong base for your finances that can resist market turbulence while providing for your income requirements on a regular basis.
Take the first step towards financial independence TODAY – head down to your nearest post office, learn about the Monthly Income Scheme, and get on the path to earning ₹1 lakh+ annually with this govt-backed investment option today!