A monthly Income Scheme (MIS) is a type of investment that guarantees the investor returns at a rate of 6.60 percent per year. These profits can be taken as a regular monthly income. The Post Office Monthly Income Scheme (POMIS) is an Indian postal service investment scheme. It guarantees the investor 6.60 percent annual returns in the form of a set monthly dividend. Seasoned investors believe MIS to be one of the best investment plans to park cash since it has three benefits: it preserves your capital, generates higher returns than debt instruments, and provides a predictable monthly income.
Key features of the Post office monthly Income Scheme
- The POMIS account can be moved from one post office to the next. The best part is that it is completely free of charge.
- A separate account must be opened for each post office deposit you make. The advantage is that a single person can open an unlimited number of accounts (of course up to the upper limit).
- POMIS allows you to reinvest the maturity amount at the conclusion of the period.
- For his Post Office Monthly Income Scheme account, the investor can also select a nominee. As a result, in the event of his untimely death, his nominee becomes entitled to his money.
- The good news is that there will be no TDS (Tax Deduction at Source) to deplete your funds. The bad news is that the earned interest is taxable.
- MIS has a 5-year maturity period. After 5 years, you should be able to withdraw the money.
Here’s what happens if you don’t remove the money within 5 years.
- If you withdraw your deposit within a year, you will receive nothing.
- Withdraw the amount after 1 to 3 years — After a small 2% deduction, you will receive your deposit back (as a penalty)
- Withdraw the amount after three years – After a modest 1% deduction, you will receive your deposit back (as a penalty)
Eligibility Criteria for POMIS
- Ideally suited to the demands of senior citizens and retirees who have recently reached the point when they no-more-pay checks zone.
- People with Indian citizenship can apply.
- The lower entry age limit is established at ten years. As a result, a kid as young as ten years old can register a POMIS account in his name.
POMIS Revised Interest Rate
The interest rate on the Post Office Monthly Income Scheme, which is paid monthly, has been reduced from 8.40 percent to 6.60 percent. Prior to April 1, 2016, the interest rate was 8.40 percent. It’s vital to note that interest income earned through this method is taxable. A person can also invest up to Rs. 4,50,000 in the Post Office Monthly Income Scheme. His/her part of the joint accounts is included in this figure. The minimum deposit is Rs. 1,000, and deposits in multiples of Rs. 1,000 are permitted.
The Monthly Income Scheme is unquestionably an effective investing strategy that effectively deploys money to provide you with a guaranteed monthly income for the duration of your investment. Furthermore, it has the government’s unwavering support. It’s no surprise that the Post Office Monthly Income Scheme is a perennial favorite among the elderly, retirees, and risk-averse investors.
Documents required to apply
- Photocopy of ID Proof
- Photocopy of address proof
- Passport sized photographs
For more detailed information go to the link given: https://groww.in/p/savings-schemes/post-office-monthly-income-scheme