Post Office MIS monthly income.
Monthly income
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Total interest over 5 years
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Your breakdown
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A monthly cheque from the Government of India
The Post Office Monthly Income Scheme, POMIS, is built for people who want a predictable monthly income with near-zero risk: retirees, homemakers, or anyone parking a windfall while they decide what to do with it. You deposit a lumpsum for a fixed five-year term, and the post office pays you interest every single month at the notified rate, currently around 7.4% a year. Your principal sits untouched and is returned in full at the end of the five years. Because it carries sovereign backing, there is no credit risk of the kind a corporate deposit or NBFC bond would carry.
The deposit limits that shape your income
POMIS caps how much you can put in, and these limits, raised in 2023, directly cap your monthly cheque. A single account takes up to 9 lakh; a joint account, with two or three adults, takes up to 15 lakh, and in a joint account each holder is treated as having an equal share. A married couple can therefore run a single account each plus a joint account to stretch their combined deposit. This calculator flags when your entry exceeds the 9 lakh single-account limit, since beyond that you must use a joint account.
A 9 lakh deposit at 7.4%
Deposit the single-account maximum of 9 lakh at 7.4%. The monthly interest is simply the deposit times the rate, divided by twelve.
That is 5,550 every month, 3.33 lakh of interest across the term, with the 9 lakh principal coming back at the end. The chart compares your monthly cheque to the principal that stays put.
The tax point everyone forgets
POMIS interest is fully taxable. It is added to your income under "income from other sources" and taxed at your slab rate, and there is no Section 80C benefit on the deposit and no TDS deducted by the post office. That last bit lulls people into not reporting it; declare it yourself, because the absence of TDS does not make it tax-free. For a senior citizen, the interest can be sheltered up to 50,000 a year under Section 80TTB if you are on the old regime. A practical tip: sweep the monthly payout into a Post Office Recurring Deposit using the auto-credit facility, so your income compounds instead of sitting idle in a savings account earning less.
What if I withdraw before five years?
Premature closure is allowed after one year, but with a penalty. Closing between one and three years costs a 2% deduction on the principal; closing between three and five years costs 1%. Before one year, you cannot withdraw at all. So treat POMIS as a genuine five-year commitment, and keep your emergency money elsewhere.
Is POMIS better than a bank FD for monthly income?
For a risk-averse saver who wants a steady monthly cheque, POMIS is competitive: the rate is government-set and often a touch higher than comparable bank deposits, and the sovereign backing beats a bank’s 5 lakh DICGC insurance. A senior citizen wanting both safety and a higher rate should also compare the Senior Citizen Savings Scheme, which pays more but is structured for quarterly, not monthly, income.