Post Office Scheme: If you’re looking for a reliable monthly income from your savings without any risk, the Post Office Monthly Income Scheme (POMIS) is a fantastic choice. This scheme is perfect for those who prefer a secure investment and want to avoid the unpredictability of the stock market. You make a one-time deposit and receive monthly interest for the next five years.
How much can you deposit and what is the interest rate?
The investment limits for this scheme are straightforward. If you open an account individually, you can deposit a maximum of Rs 9 lakh. However, if a husband and wife or two to three individuals open a joint account, the limit rises to Rs 15 lakh. Currently, the government offers an annual interest rate of 7.40% for this scheme. Importantly, once your account is established, you will continue to earn interest at this rate for a full five years, even if rates change later.
How much money will you receive each month?
Your monthly income is based on the amount you deposit. For instance:
On depositing Rs 1 lakh: About Rs 617 per month
On depositing Rs 5 lakh: About Rs 3,083 per month
On depositing Rs 15 lakh (joint account): Rs 9,250 per month
This amount is directly credited to your Post Office Savings Account each month.
What happens if you withdraw the money early?
The maturity period for POMIS is five years, but you can close it earlier in case of an emergency. However, there are specific rules:
Before 1 year: You cannot withdraw the funds.
Between 1 to 3 years: 2% of the total deposit will be deducted and returned.
Between 3 to 5 years: 1% will be deducted from the deposit amount.
Who should invest and what are the tax implications? This scheme is particularly beneficial for retirees and homemakers who require a steady income to manage their households. Remember that deposits are not tax-deductible under Section 80C, and the interest earned is added to your annual income and taxed according to your tax bracket. You can easily open this account by visiting your nearest post office with your identification card and photo.
