Many people in India look for safe and reliable ways to earn a steady income. One such option is the Post Office Monthly Income Scheme (POMIS). It is a government-backed saving scheme that provides a guaranteed monthly income to its investors. Because it is backed by the Government of India, it is considered very safe, with virtually no risk of losing the invested money.
What is POMIS?
The Post Office Monthly Income Scheme (POMIS) is designed to provide regular monthly income for small and medium investors. It is especially useful for retired individuals, homemakers, or anyone who wants a fixed monthly income without taking risks in the stock market. Investors deposit a lump sum amount in the scheme, and the post office pays them interest every month.
Key Features of POMIS
- Safety: POMIS is backed by the Government of India, so the risk of default is almost zero.
- Interest Payment: The interest is paid every month directly, giving a regular income stream.
- Deposit Limit: Any individual can invest between ₹1,500 to ₹4.5 lakh in a single account. For a joint account, the limit is ₹9 lakh.
- Tenure: The maturity period of POMIS is 5 years. After 5 years, the principal is returned along with the final month’s interest.
- Taxation: Interest earned on POMIS is taxable under the head “Income from Other Sources.”
- Account Opening: You can open a POMIS account in any India Post Office. No minimum age limit applies.
Interest Rate of POMIS
The interest rate of POMIS is fixed by the Government of India and is usually revised quarterly. Currently, the interest rate is 7.6% per annum (please check the latest rate at your local post office as it may change). The interest is calculated monthly but paid out at the end of each month.
How Much Can You Earn?
The monthly income depends on the principal amount invested. Let’s calculate how much one can receive for investments of ₹2 lakh, ₹5 lakh, and ₹10 lakh.
Formula to Calculate Monthly Income: Monthly Income=Principal×Interest Rate12\text{Monthly Income} = \frac{\text{Principal} \times \text{Interest Rate}}{12}Monthly Income=12Principal×Interest Rate
Where:
- Principal = invested amount
- Interest Rate = annual rate in decimal form (7.6% = 0.076)
1. Investment of ₹2,00,000 Monthly Income=2,00,000×0.07612=15,20012=₹1,266.67\text{Monthly Income} = \frac{2,00,000 \times 0.076}{12} = \frac{15,200}{12} = ₹1,266.67Monthly Income=122,00,000×0.076=1215,200=₹1,266.67
So, if you invest ₹2 lakh in POMIS, you will receive approximately ₹1,267 per month.
2. Investment of ₹5,00,000 Monthly Income=5,00,000×0.07612=38,00012=₹3,166.67\text{Monthly Income} = \frac{5,00,000 \times 0.076}{12} = \frac{38,000}{12} = ₹3,166.67Monthly Income=125,00,000×0.076=1238,000=₹3,166.67
An investment of ₹5 lakh will give you a monthly income of around ₹3,167.
3. Investment of ₹10,00,000 Monthly Income=10,00,000×0.07612=76,00012=₹6,333.33\text{Monthly Income} = \frac{10,00,000 \times 0.076}{12} = \frac{76,000}{12} = ₹6,333.33Monthly Income=1210,00,000×0.076=1276,000=₹6,333.33
With ₹10 lakh invested, you can earn roughly ₹6,333 per month.
Why Choose POMIS?
- Guaranteed Income: Unlike stock markets or mutual funds, POMIS offers a fixed and guaranteed monthly income.
- Simple and Easy: The process of opening and managing the account is very straightforward. You don’t need to be financially savvy.
- Safe Investment: Since it is a government-backed scheme, there is no risk of capital loss.
- Ideal for Retirees: Senior citizens can benefit from a steady income without taking risks.
- Flexible Amounts: You can invest according to your affordability and income requirements.
Things to Keep in Mind
- Taxation: The monthly interest you earn is taxable under your income slab. There is no tax benefit on the investment itself. If you want tax-free income, you may need to look at other schemes like the Senior Citizen Savings Scheme (SCSS) or PPF.
- Withdrawal: POMIS has a fixed tenure of 5 years. Premature withdrawal is allowed but with reduced interest rates.
- Interest Rate Changes: If you are investing for the long term, keep in mind that the government may revise the interest rate in future periods, but the rate at the time of deposit will generally remain fixed for the investment term.
How to Open a POMIS Account?
- Visit your nearest Post Office.
- Fill out the POMIS application form.
- Submit KYC documents like Aadhaar card, PAN card, and passport-sized photos.
- Deposit the desired amount (between ₹1,500 to ₹4.5 lakh for a single account).
- Collect your account receipt and details.
The post office will then credit the monthly interest directly to your account, making it hassle-free.
Conclusion
The Post Office Monthly Income Scheme (POMIS) is one of the safest and most reliable ways to earn a regular monthly income in India. Whether you are a retiree, a homemaker, or someone looking to secure your finances, POMIS provides a predictable income stream with zero risk to your capital.
Investing in POMIS can help you plan for your monthly expenses, manage household budgets, and gain financial peace of mind. For example, an investment of ₹2 lakh gives around ₹1,267 per month, ₹5 lakh gives around ₹3,167 per month, and ₹10 lakh provides approximately ₹6,333 per month.
