- POMIS interest shall be payable on completion of a month from the date of opening and so on till maturity
Post Office Monthly Income Scheme (POMIS) is one of the most popular risk-free post office saving schemes where an investor can invest with a minimum deposit of ₹1,000. Middle and low income group investors can look at this Post Office MIS scheme as tax-saving option as well because one can claim income tax exemption under Section 80C of the Income Tax Act on one’s investment in this scheme. It has a lock-in period of 5 years and Post Office Monthly Income Scheme interest rate will remain unchanged throughout the investment period. Means, return on Post Office Monthly Income Scheme is guaranteed and an investor would get return on one’s money as per the Post Office Monthly Income Scheme interest rate at the time of investment.
Here we list out important details that an investor must know while investing in Post Office Monthly Income Scheme:
1] Interest rate: As this post office small saving scheme is a lock-in product, its interest rate will remain fixed as per the rate of return at the time of investment. For example, Post Office Monthly Income Scheme interest rate is currently at 6.60 per cent per annum. So, if an investor invests in this post office scheme, it will get 6.60 per cent annual return on one’s money at the time of maturity.
Interest shall be payable on completion of a month from the date of opening and so on till maturity and an investor has to claim for it. As per the India Post website, “If the interest payable every month is not claimed by the account holder such interest shall not earn any additional interest.” The Post Office Monthly Income Scheme interest is taxable into the hands of depositor.
2] Deposits: As per the India Post website, Post Office MIS account can be opened with minimum of ₹1000 and in multiple of ₹100. A maximum of ₹4.50 lakh can be deposited in a single account and 9 lakh in joint account. In a joint account, all the joint holders shall have equal share in investment.
3] Lock-in period: Like any tax-saving fiat money, this post office saving scheme also has 5 year lock-in period. One can claim income tax exemption on one’s investment in this scheme under Section 80C of the Income Tax Act, 1961.
4] Guaranteed return scheme: this post office scheme is a risk-free guaranteed return scheme. If an investor invests in this Post Office Monthly Income Scheme today, it will get 6.60 per cent return on one’s investment at the time of maturity.
5] Maturity: Account can be closed on expiry of 5 years from the date of opening on submission of application form with pass book at concerned Post Office. In case the account holder dies before the maturity, the account may be closed and amount will be refunded to nominee/legal heirs. Interest will be paid up to the preceding month, in which refund is made.
6] Pre-mature closure of account: No deposit shall be withdrawn before the expiry of 1 year from the date of deposit. If account is closed after 1 year and before 3 year from the date of account opening, a deduction equal to 2 per cent from the principal will be deducted and remaining amount will be paid. If account closed after 3 year and before 5 year from the date of account opening, a deduction equal to 1 per cent from the principal will be deducted and remaining amount will be paid.
7] Eligibility: Only an Indian resident can open a Post Office Monthly Income Scheme account. By submitting the needed documentation to the nearest Post Office, any adult can open this Post Office MIS account. A minor above 10 years in age can open this account in his own name.
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