If you are looking for an easy monthly return which is risk free, Post Office Monthly Income Scheme (POMIS) might be the best option for you. Post Office Monthly Income Scheme is a small savings scheme that offers a fixed monthly income on an investment of a hefty amount. POMIS is an unique scheme offered by India Post office and through its various branches. With an assured monthly income and high returns, Post Office Monthly Income Scheme is best suited for senior citizens.
Eligibility: Any resident of India can open an account under Post Office Monthly Income Scheme by visiting the nearest branch of India Post. POMIS account can be easily transferable from one post office branch to another branch without any extra cost. NRIs are not allowed to avail the benefits of POMIS. The minimum age of opening an account under POMIS is as low as 10 years.
Amount: A minimum amount of ₹1,500 is required to open an account under this scheme. The maximum one can invest in this scheme is ₹4.5 lakh. India Post also offers nomination facility on POMIS scheme at the time opening or after opening the account.
Joint account: India Post also allows two or three individuals to open a joint account under Post Office Monthly Income Scheme. The maximum limit can go up to ₹9 lakh while opening a joint account. All joint account holders have equal share in each joint account, clarifies India Post. Single accounts can also be converted into joint accounts during the tenure.
Interest rate: Interest rate on Post Office Monthly Income Scheme is fixed by the Central government. Finance Ministry resets interest every quarter depending on the yield from government bonds of similar tenure. For current October to December quarter, the interest on Post Office Monthly Income Scheme is fixed at 7.6%. The interest rate is calculated on an annual basis and is paid monthly to an depositors. The interest rate you earn on POMIS for the duration of the deposit will be the rate at which you made the original deposit.
Maturity: Accounts opened under Post Office Monthly Income Scheme has a tenure of five years.
Pre-mature withdrawal: India Post allows premature withdrawal after one year with a deduction of a nominal amount. If one withdraws after one year and before completing three years, he/she will get deposit back after deduction of 2% as penalty. For withdrawing deposit after 3 years, India Post will deduct 1% from the amount accumulated in the account.
No tax benefit: POMIS does not enjoy any tax breaks. The contribution does not qualify for any tax deduction and the interest income is taxable at the marginal rate.