The Post Office Monthly Income Scheme (POMIS) is one of the most reliable and secure investment options for individuals seeking guaranteed monthly returns. This government-backed savings scheme allows investors to park their funds safely while receiving a fixed interest payout every month. But how does it work, and how can you use it to earn ₹10,000 per month? Let’s break it down
What is the Post Office Monthly Income Scheme (POMIS)?
The Post Office Monthly Income Scheme (POMIS) is a fixed deposit scheme that provides a steady monthly interest payout. The scheme is ideal for individuals who want a safe investment with guaranteed returns.
Features of POMIS
- Government-backed safety: Your principal amount is completely secure.
- Fixed interest rate: Currently set at 7.4% per annum.
- Monthly interest payout: Get consistent income every month.
- Joint accounts available: Up to three account holders can open a joint account.
- Premature withdrawal allowed: After one year with a penalty.
- Investment transferability: If you relocate, your account can be transferred to any post office in India.
- Auto-credit option: Monthly interest can be credited directly to your savings account.
How to Earn ₹10,000 Per Month with POMIS?
To receive a monthly income of ₹10,000, you need to invest a lump sum amount in POMIS. Let’s calculate the required investment.
Calculation:
- Interest Rate: 7.4% annually = 0.6167% per month
- Monthly Interest Formula:
Required Investment = ₹10,000 ÷ 0.6167%
≈ ₹16,21,622
Since the maximum investment limit per single account is ₹9 lakh, you will need to open multiple accounts in your name or a joint account with family members.
Step-by-Step Guide to Open a POMIS Account
1. Check Your Eligibility
- Only Indian residents can open a POMIS account.
- Minors (aged 10 and above) can also open an account under guardian supervision.
2. Visit Your Nearest Post Office
- Collect the POMIS application form.
- Bring necessary KYC documents (Aadhaar, PAN card, passport-size photographs, and proof of address).
3. Fill Out the Application Form
- Provide your details and select a nominee.
4. Deposit Your Investment
- You can invest via cash, cheque, or demand draft.
5. Account Activation
- After verification, your account will be activated, and you will receive a passbook.
6. Monthly Payout Begins
- The interest is credited directly to your savings account every month.
Advantages of Investing in POMIS
1. Guaranteed Monthly Income
POMIS ensures a fixed and predictable income every month, making it a great choice for retirees and individuals looking for passive income.
2. 100% Safe Investment
Being a government-backed scheme, your money is completely secure, unlike stocks or mutual funds.
3. No TDS on Interest Earned
Unlike some fixed deposits, POMIS does not have TDS (Tax Deducted at Source), but the interest earned is taxable as per your income slab.
4. Flexible Account Options
- Single or joint accounts available.
- Transferable across any post office in India.
5. Reinvestment Options
Once the 5-year tenure is complete, you can reinvest in POMIS or opt for other post office savings schemes like Senior Citizens Savings Scheme (SCSS) or National Savings Certificate (NSC).
Considerations Before Investing
- POMIS is not inflation-proof, meaning the interest rate may not keep up with inflation.
- You cannot make additional deposits into an existing account.
- No tax benefits under Section 80C, and the interest earned is taxable.
- Premature withdrawal penalties apply if you withdraw before maturity.
Post Office Monthly Scheme (FAQs)
1. Can I withdraw my money before 5 years?
Yes, but with a penalty:
- 1-3 years: 2% deduction on principal.
- 3-5 years: 1% deduction on principal.
2. Can I open multiple POMIS accounts?
Yes, as long as the total investment does not exceed ₹9 lakh (single) or ₹15 lakh (joint).
3. Is the monthly interest taxable?
Yes, interest earned is added to your taxable income but there is no TDS deduction.
4. Can NRIs invest in POMIS?
No, only Indian residents are eligible.
