Post Office Monthly Income Scheme: How It Works

Monthly Income Scheme (MIS) is an investment scheme that promises the investor guaranteed returns at an interest rate of 7.7% per annum. These returns can be availed as a fixed monthly income. The most experienced of investors consider MIS to be one of the best options to invest funds in, as it provides the customer benefits of three kinds:

• MIS keeps the capital intact.
• It ensures that the customer receives a fixed monthly income.
• It yields better returns than instruments that are debt-based.

top features and benefits of the Post Office MIS scheme;

• This investment option is a fixed income scheme, and the money deposited by investors are not subject to market risk, which is why the scheme is a low-risk investment. As this is a government-backed scheme, the investments are also protected by the government until maturity.
• Investments with MIS comes with a lock-in period of 5 years, which can be withdrawn or re-invested once the investment matures.
• As low as Rs 1,000 can be invested to start a monthly income scheme. Investors can also multiply this amount over time.
• Investments in this Post Office scheme does not fall under section 80C. Hence, income is subjected to taxation, but it has no TDS.
• Starting from the first month of making the investment investors will receive the payout from this scheme, which comes at the end of every month, and not the beginning.
• The returns from the investment in POMIS earn guaranteed returns in the form of interest every month, but it does not beat inflation.
• An investor can have multiple account ownership, however, the total deposit amount cannot exceed Rs 4.5 lakhs all together.
• With MIS investors can open a joint account, with up to 3 people. Note that, the account belongs to all account holders equally, irrespective of who is making the contribution.
• An account can also be opened on behalf of a minor aged 10 or above, however, the total deposited amount cannot exceed Rs 3 lakh.
  The minor on whose behalf the account is opened will be able to access the funds after reaching 18 years of age.

How the Post Office Monthly Income Scheme Works?

The process of investing in POMIS can be done easily and requires minimal documentation. The investor will be required to submit a copy of his/her identity proof, an address proof, and some passport size photographs. The ID proof can be the passport, ration card, PAN card, or voter identity card.

At the beginning, the customer is required to open an account, either on an individual basis or as a joint account. The table below shows the minimum and maximum funds that can be invested in the post office monthly income scheme: