How POMIS works
The Post Office Monthly Income Scheme is a 5-year government deposit that pays interest every month into your post office savings account. The rate is fixed when you open the account, currently 7.4% for July–September 2026, and your principal comes back in full after five years.
Monthly income = deposit × rate ÷ 12Worked example
Key rules
| Feature | Rule |
|---|---|
| Deposit limit | ₹1,000 minimum; ₹9 lakh single, ₹15 lakh joint (up to three adults) |
| Tenure | 5 years |
| Early closure | Not before 1 year; 2% deduction from 1–3 years, 1% from 3–5 years |
| Tax | Interest taxable at slab rate; no TDS by the post office |
Using POMIS well
POMIS is popular with retirees and anyone who wants a predictable monthly cash flow. Two common strategies:
- Pair it with an RD: have the monthly interest automatically fund a post office recurring deposit, turning simple interest into compounding growth.
- Combine with SCSS: senior citizens often use SCSS (higher rate, quarterly payouts) first, then POMIS for monthly income.
Because the monthly income is fixed, inflation reduces its buying power over five years. Keep some money in growth investments too.
POMIS vs a monthly-payout bank FD
| Post Office MIS | Bank FD with monthly interest | |
|---|---|---|
| Rate | Set by the government, currently 7.4% | Varies by bank; slightly reduced for monthly payout |
| Safety | Sovereign guarantee, no limit | Deposit insurance up to ₹5 lakh per bank |
| Maximum | ₹9 lakh single, ₹15 lakh joint | No limit |
| Tenure | Fixed at 5 years | Flexible, from 7 days to 10 years |
| TDS | Not deducted | Deducted above the yearly threshold |
If the rates are similar, POMIS usually wins on safety for amounts above ₹5 lakh, while a bank FD wins on flexibility of tenure and amount. Many retirees hold both.
Frequently asked questions
Is POMIS safe?
Yes. It is a Government of India scheme run by India Post, so your deposit carries a sovereign guarantee.
Can I open more than one POMIS account?
Yes, but your total across all single accounts can't exceed ₹9 lakh, and your share across joint accounts counts toward ₹15 lakh.
Is POMIS interest taxable?
Yes, at your slab rate. The post office doesn't deduct TDS, so include it in your income when filing.
Official references: India Post – Savings schemes · National Savings Institute