Who should invest in POMIS?
- POMIS is a low-risk investment as this scheme is backed by government, making it suitable for conservative investors who prioritise capital preservation and are not comfortable with higher-risk options.
- POMIS can be attractive for retirees and senior citizens who are looking for a steady monthly income stream to supplement their pension or other income sources.
- Individuals who prioritise regular income over high returns may find POMIS appealing. It provides a fixed monthly payout, offering financial stability.
Post Office Monthly Income Scheme interest rates
- As of 01.01.2024, the interest rate on Post Office Monthly Income Scheme is 7.4% per annum, which is payable monthly.
- Interest will be paid monthly starting from the date of account opening until maturity.
- If the account holder does not claim the monthly interest, it will not earn any additional interest.
- If the depositor makes an excess deposit, the excess amount will be refunded, and only the PO savings account interest will be applicable from the date of account opening to the date of refund.
Read Also: What Is Post Office Tax Saving Scheme
Features of POMIS
- Capital protection: Backed by the government, ensuring the safety of your investment until maturity.
- Low-risk investment: You earn a fixed rate of interest as it does not depend on the market forces, making it a secure option for investors.
- Payout timing: Receive payouts after one month from the initial investment, not at the beginning of every month.
- Nomination facility: Nominate a family member as a beneficiary for ease of claims in case of the investor's demise.
- Transaction ease: Collect monthly interest directly from the post office or you can opt for automatic transfer to your savings account.
- Reinvestment option: Post maturity, you can also reinvest the corpus for another five years.
If you want to earn monthly interest on your investment, you can also consider Fixed Deposit as an option. Financial institution like Bajaj Finance, offers interest rate of up to 8.85% p.a. on FDs, and flexible payout options like monthly, quarterly, half yearly, annually. You can choose any of payout option according to financial needs, and easily invest online through the Bajaj Finserv app or website.
Documentation required to open Post Office Monthly Income Scheme
- Submit a government-issued ID or recent utility bills as proof of your address.
- Provide a copy of a government-issued ID, like Passport, Voter ID card, Driving License, Aadhaar, etc.
- A passport-size photo
How to Open a POMIS Account?
To open a POMIS account you must have a Post Office savings account. If you don’t have a Post Office saving account, visit your nearest Post Office an open an account. Then, proceed with the following steps to open a POMIS Account:
- Get a POMIS account opening form from the nearby post office.
- Complete the form and submit the required documents along with signature of any witness or nominee (take original documents for verification)
- Initial amount can be deposited through a cheque, the cheque date considered as the account opening date.
Read Also: What Is Post Office Tax Saving Scheme
Eligibility criteria for opening Post Office Monthly Income Scheme account:
- Indian citizenship.
- A guardian is permitted to open an account on behalf of a minor or a person of unsound mind.
- Minors aged 10 years and above have the eligibility to open an account in their own name.
Early withdrawal penalty POMIS
- No withdrawals allowed within the first year from the date of deposit.
- If closed after 1 year but before 3 years, a deduction equal to 2% from the principal will be applied, and the remaining amount will be paid to the account holder.
- If closed after 3 years but before 5 years, a deduction equal to 1% from the principal will be applied, and the remaining amount will be paid to the account holder.
- The account can be prematurely closed by submitting the prescribed application form along with the passbook at the concerned post office.
POMIS premature withdrawal rules
- No withdrawal is allowed within the first year from the date of deposit.
- If the account is closed after 1 year but before 3 years from the date of opening, a deduction of 2% from the principal will be applied, and the remaining amount will be paid.
- If the account is closed after 3 years but before 5 years from the date of opening, a deduction of 1% from the principal will be applied, and the remaining amount will be paid.
- To close the account before maturity, submit the prescribed application form along with the passbook at the concerned Post Office.
Post Office Monthly Income Scheme stands as a viable investment option for those seeking a regular and stable income. With straightforward procedures for opening an account at any post office in India, POMIS offers fixed returns. While it may not be suitable for everyone, POMIS serves as a reliable choice for conservative investors looking for a steady monthly income.
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