Monthly Income Scheme

What is Monthly Income Scheme ? | MIS | Post Office Monthly Income Scheme | POMIS | 1 Best Guaranteed Monthly Returns

Blog Introduction

Hello Friends, Welcome to my Blog the best financial blogs where you will be able to read about the end to end information on many investment schemes and financial topics. In this Blog post we will be focusing on Monthly Income Scheme.

Generally when we want to invest money on any investment scheme , we always asks our friends and relatives that where we can invest ? and they suggests the investment schemes which they like most. Then we invest as per their suggestions, that is good as we consider them as our well wisher , But here I want to mention one thing, if we know end to end information of each investment schemes at least it will help us to understand if that investment scheme is good for us or not.

Hence it is better to have a complete idea about each investment scheme where we invest. Therefor this blog will help you to know end to end information of many Indian investment schemes available right Infront of you.

In this blog post I will be explaining my analysis on Monthly Income Scheme. This will be a complete guide on Monthly Income Scheme. Please read till end of the blog post to know the complete information about this Monthly Income Scheme. Lets get started.

Table of Contents

What is Monthly Income Scheme ?

Monthly income scheme (MIS) is a scheme which provides a regular monthly income. This is suitable for those who expect to receive regular and guaranteed income on a monthly basis. We also call this scheme as POMIS ( Post Office Monthly Income Scheme ).

Features Of Monthly Income Scheme (MIS) ?

  • This scheme is backed by the Government of India.
  • This scheme is a safe investment option.
  • This scheme gives you the guaranteed returns.
  • Through this scheme you can earn a regular monthly income.

How Does Monthly Income Scheme (MIS) Work?

You need to deposit a lump sum amount. Every month you will receive interest till the end of the tenure. At the end of the tenure, you will get your deposit amount back.

Eligibility : Who Can Open The MIS Account?

  • Only Indian residents can open the account.
  • Account can be opened by an individual adult.
  • Joint account can be opened by two or three adults. All joint account holders have equal share in each joint account.
  • A Guardian or Parent can open an account in the name of minor.
  • You can open an account on the behalf of a minor who is aged 10 years and above. They can avail the fund when they become 18 years old.
  • A minor, after attaining majority, has to apply for conversion of the account in his/her name.

Deposit Limits in MIS.

  • Minimum deposit amount is Rs. 1,000.
  • For a single account, maximum deposit limit is Rs. 4.5 lakhs.
  • For a joint account, maximum deposit limit is Rs. 9 lakhs.
  • Deposit amount should be in multiples of Rs. 1,000.
  • An individual can invest a maximum of Rs. 4.5 lakhs in MIS (including his/her share in joint accounts).

MIS Term/Maturity Period

MIS Maturity period is 5 years .

MIS Interest Rate (%).

  • Current annual interest rate is 6.60%.
  • Interest amount is paid on a monthly basis.
  • Interest rate (on the day of account opening) will remain the same throughout the tenure of MIS. It will not change even if there are changes to the interest rate thereafter.
  • From 01-Apr-2016, the interest rate of this scheme has been announced on a quarterly basis. previously that it used to be on a yearly basis earlier.

MIS Compounding Frequency

Compound interest is not applicable for this scheme. Simple interest calculation is followed in this scheme.

MIS Interest Credit Method

  • You can receive monthly interest through auto-credit facility into savings account present at the same post office.
  • In case of MIS accounts present at CBS (Core Banking Solution) Post offices, monthly interest can be credited into savings account present at any CBS Post offices.

Pre-Mature Closure of MIS account

  1. Account can be closed pre-maturely after one year of opening the account.
  2. If you close the account before 3 years, 2% of deposit amount will be deducted and you will get the remaining amount.
  3. If you close the account after 3 years, 1% of deposit amount will be deducted and you will get the remaining amount.

For an Example.

  • If you close the account having a deposit of Rs. 1 lakh before 3 years, then Rs. 2,000 (2% of Rs. 1 lakh) will be deducted and you will receive the remaining amount Rs. 98,000 (Rs. 1 Lakh minus Rs. 2,000).
  • If you close the account having a deposit of Rs. 1 lakh after 3 years, then Rs. 1,000 (1% of Rs. 1 lakh) will be deducted and you will receive the remaining amount Rs. 99,000 (Rs. 1 Lakh minus Rs. 1,000).

Income Tax Benefits of Monthly Income Scheme

  • No income tax benefits.
  • No tax deduction for the deposit amount under Section 80C of Income Tax Act.
  • No TDS (Tax Deducted at Source) under this scheme by the Post Office.
  • Interest received under this scheme is taxable. You need to declare the interest income under “Income from Other Sources” during tax returns and pay the income tax as per your income tax slab.

MIS Account Conversions

  • Single account can be converted into Joint account and Vice Versa.
  • Minor after attaining majority has to apply for conversion of the account in his name.

MIS Account Transfer

MIS Account can be transferred from one Post Office to another.

MIS Nomination Facility

Nomination facility is available. You can nominate either at the time of account opening or after opening the account (but before maturity).

MIS Monthly Earning Projection Table

Deposited Amount In INR Interest Rate (%) TenureMonthly Income in INR
Single Account
Deposited Amount In INR Interest Rate (%) TenureMonthly Income in INR
Joint Account

FAQ About Monthly Income Scheme (MIS)

Can NRI and HUF Open This MIS Account?

No. NRI (Non Resident Indians) and HUF (Hindu Undivided Family) can NOT open the account.

Is this Monthly Income Scheme suitable for senior citizens?

Yes. This is a favourable scheme for senior citizens as they can deposit their life savings in the account and earn interest for their monthly expenses which is risk free and guaranteed income.

What happens to my MIS account if I have to move from one city to another due to work?

In the event of shifting from one city to another, you can easily transfer your MIS account to the Post Office in the current city at free of cost.

My Recent Post in this blog.

  1. SCSS complete end to end information
  2. KVP complete end to end information

Note : If you are interested to learn guitar the please follow my Guitar Blogs Click Here .

Thanks a lot for reading my blogs. If you like then please don’t forget to comment and share with your friends and family .

Add a Comment

Your email address will not be published. Required fields are marked *