Overview on Post Office Monthly Income Scheme
One of the benefits of having numerous schemes available for individuals to invest in is that customers have the option to pick one that is most suited to their income and other requirements. Generally, most individuals would prefer opting for those investment schemes that are relatively risk free, while offering guaranteed returns. Although investments that are not very risky by nature do not offer high returns, whatever offered is substantial enough for applicants to invest high amounts in.
One such popular scheme that is chosen quite often is the Post Office MIS or Monthly Income Scheme. Investors are rewarded with assured returns every month on their deposit. This is one of the most beneficial investment options that can be procured as it offers returns, ensures that the capital invested is intact and also provides a fixed income every month. This scheme is provided by the Indian Postal Service and is administered by the Finance Ministry of India, making this one of the most secure options to invest in.
Features and Benefits of Post Office MIS
This scheme comes with a number of advantages and features. These are listed below:
- The period of maturity for this scheme is 5 years, as of 1 December 2011.
- This account can be opened by both individuals and also in the form of a joint account. This joint account can be opened by two- three adults.
- The minimum amount that should be deposited into this account is Rs.1,500 for both single as well as joint account holders.
- In case of a joint account, all holders will have equal share. Applicants can also convert their single account to a joint account, or even vice versa.
- Applicants can open an account by cheque or cash. In case a cheque is being given, the opening date of the account will be the date of realization of cheque in the Government account.
- Customers have the option to nominate others to their account both at the time of opening the account and also once they open the account.
- In case customers have shifted their residence or find the current post office branch inconvenient, they have the option to transfer their account from one branch of the post office to other branches.
- Customers can open multiple accounts at any post office. However, this will be subject to the highest amount of investment limit by the addition of balance amount in all the accounts.
- One of the most unique advantages of this scheme is that, minors can also open a Post Office Monthly Income Scheme account. However, the minor will have to be either 10 years of age, or older.
- Whenever the minor reaches the age of 18, he/she will have to apply for a conversion of his/her Post Office Monthly Income Scheme account.
- Through auto-credit, interest can be automatically credited to the savings account of the individual at the same post office, through electronic clearing system or post-dated cheques. In case the said post office with Monthly Scheme Income account has availed the facility of Core Banking Solution (CBS), interest can be credited to the savings account at the CBS post office, every month.
Interest Rates for PO Monthly Income Scheme
As of 1 April, 2016, the revised rate of interest applicable on the Post Office Monthly Income Scheme is 7.80% per year, and is payable monthly.
Eligibility Criteria for Post Office Monthly Income Scheme
The main eligibility criteria that is applicable for the Post Office Monthly Income Scheme is that, the applicant must be a resident of India.
Documents Required for Post Office MIS
The main documents required are -
- Proof of address such as Voter ID, Utility bills, Aadhaar Card, Passport
- Proof of Identity such as PAN Card, Aadhaar Card, Passport, Passbook
- Passport size photos
Applicants must also carry their original documents along with extra copies of the same.
Premature Withdrawal for Post Office Monthly Income Scheme
In order to withdraw money, an application must be submitted for the same. The period of maturity for a Post Office Monthly Income Scheme is 5 years. This interest amount can be encashed prematurely as well, but only after a period of one year.
In case customers wish to encash their interest after a year of availing the scheme, but before 3 years then 2% will be deducted from the deposit. In case, customers wish to withdraw after a period of 3 years but before 5 years, then a deduction of 1% will be applicable.
Frequently Asked Questions (FAQs) on India Post MIS
- Is there a bonus amount payable at maturity?
No, there is no bonus that is payable on deposits that have been made on or after 1 December, 2011. However, for those schemes that were opened before, a 5% bonus was payable on the principal amount.
- Are tax rebates offered on the Post Office Monthly Income Scheme?
No, there are no tax rebates offered on the Monthly Income Scheme.
- What is the maximum amount that can be invested into the Monthly Income Scheme?
| Account Type |
Maximum Amount Allowed |
| Single |
Rs.4,50,000 |
| Joint |
Rs.9,00,000 |
- Applicants must note that, the maximum amount that is allowed is calculated on an individual basis, even if the customer holds a joint account.
- For example, if Mr. A has invested Rs.2,00,000 into his single account. He also has a joint account with his wife and deposits Rs.5,00,000. Therefore, Mr. A cannot invest anymore into the Monthly Income Scheme as he has reached the limit of Rs.4,50,000 per person. However, his wife can invest another Rs.2,50,000 if she chooses to, as the amount in the joint account is split equally between all the account holders.
- What happens if money is not withdrawn from the Monthly Income Scheme account even after 5 years?
In case applicants have not withdrawn the money from their Monthly Income Scheme account even after the maturity period of 5 years, they may receive the applicable interest for a period of two years but none after that, resulting in the account becoming idle. Further information regarding this can be sought at the nearest post office.
- What is the maximum amount that can be invested into this scheme by a minor?
An account operated by minor is only allowed a maximum of Rs.3,00,000 as deposit.
- Is the facility for nomination available for the Monthly Income Scheme?
Yes, applicants have the option of choosing a nominee for their account.
- What will happen to the account in case the depositor expires?
In case the depositor expires prior to maturity of the account, his/her nominee or heir must close the account. The amount that has been deposited along with applicable interest (until the month preceding the refund date) will be provided to the nominee/heir.
Updated on 26 September ‘16
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