Post Office Scheme: If you’re looking to set up a monthly allowance for your child, the Post Office Monthly Income Scheme (POMIS) could be a great option. This scheme requires a one-time deposit, after which you will receive a consistent monthly interest payment. Currently, the scheme offers an annual interest rate of 7.4%. For a deposit of Rs 10 lakh, you can expect to receive around Rs 6,167 each month. After five years, your full deposit is returned.
Make a single investment and receive a fixed monthly income The Post Office Monthly Income Scheme is part of the government’s small savings initiatives. Investments in this scheme are deemed completely secure as they are backed by the government. You can start investing with a minimum of Rs 1,000. If you invest Rs 10 lakh, you will earn about Rs 74,000 in interest annually at the rate of 7.4% per annum, translating to roughly Rs 6,167 credited to your account each month. For a deposit of Rs 5 lakh, you can expect to earn around Rs 3,083 in monthly interest.
The entire principal amount is returned after five years. Who is eligible to open an account? Only Indian citizens are permitted to open this account. Under this scheme: An adult can open a single account. Three adults can jointly open an account. Parents or legal guardians can open an account in the name of a minor child. An authorized guardian can also open an account for someone who is mentally ill. A minor aged 10 years or older can manage this account in their own name.
What is the maximum investment allowed?
In this scheme, you can deposit a maximum of Rs 9 lakh in a single account. For a joint account, the limit is Rs 15 lakh. An individual may open multiple accounts, but the total investment across all accounts must not exceed the specified limit. Interest earned from the scheme is credited monthly to your bank account via a Post Office Savings Account or ECS.
If you do not withdraw the interest in any given month, you will not earn any additional interest. When can you withdraw the money? The lock-in period for this scheme is 5 years. However, premature closure is possible if needed. There are some rules for this: Funds cannot be accessed within the first year of account opening. If the account is terminated after one year but before three years, a fee of 2% of the deposit will be applied.
A 1% deduction will occur if the account is closed after three years but before five years. For parents looking to set aside a fixed monthly sum for their child, this scheme presents a great opportunity. The monthly funds can be allocated for education, coaching, books, pocket money, or other essential costs. After five years, the full deposit is returned, which can be utilized for further education or achieving a larger goal. The Post Office Monthly Income Scheme is regarded as an excellent choice for families in search of a secure investment and a consistent monthly income.