If you’re looking for a stable and low-risk investment that guarantees a fixed monthly return, the Post Office Monthly Income Scheme (POMIS) could be the perfect fit. By depositing ₹5,55,555 in this scheme, you can potentially earn a monthly income of ₹22,222. Let’s explore how the scheme works, who can apply, and what makes it a preferred choice among risk-averse investors and retirees.
What is the Post Office Monthly Income Scheme?
The Post Office Monthly Income Scheme (POMIS) is a government-backed small savings scheme designed to provide a consistent monthly income to investors. It’s especially popular among retirees, senior citizens, and conservative investors who prioritize capital safety and assured returns over high-risk, market-linked investments.
By depositing a lump sum amount for a fixed tenure of five years, investors receive monthly interest payouts, making it a reliable option for supplementary income.
Key Features of POMIS
The scheme offers features that make it ideal for cautious investors:
| Feature | Details |
| Minimum Investment | ₹1,500 |
| Maximum Investment (Single) | ₹4.5 lakh |
| Maximum Investment (Joint) | ₹9 lakh |
| Interest Payout | Monthly |
| Lock-in Period | 5 years |
| Premature Withdrawal | Allowed with penalty after 1 year |
| Interest Rate | Updated quarterly by the government |
| Tax Benefit | No deduction under Section 80C |
| Risk Level | Very low (government-backed) |
Benefits of Investing in POMIS
There are several advantages to choosing POMIS for your investment portfolio:
Assured Monthly Income: Returns are guaranteed and disbursed monthly.
Capital Protection: Since it’s backed by the Indian government, your principal is safe.
Ease of Access: Available across thousands of post office branches.
Flexible Investment Size: Invest as low as ₹1,500 or up to ₹9 lakh (joint account).
No Market Risk: Completely insulated from market volatility.
Simple Application: Easy to open and manage the account with basic KYC.
Eligibility Criteria
To open a POMIS account, you must fulfill the following requirements:
| Criterion | Details |
| Age | Minimum 18 years; minors allowed via guardian |
| Residency | Only Indian residents are eligible |
| KYC Compliance | Individual or Joint account holders are allowed |
| Account Type | Individual or Joint account holders allowed |
| Existing Account | Must have a post office savings account |
Note: NRIs are not eligible to invest in this scheme.
Who Can Apply and How?
Anyone who meets the eligibility criteria can apply. Here’s a detailed breakdown:
| Category | Eligibility |
| Senior Citizens | Yes |
| Working Professionals | Yes |
| Homemakers | Yes |
| Students (via guardian) | Yes |
| NRIs | No |
Investment Example and Monthly Earnings
A lump sum investment in POMIS can yield consistent monthly earnings. Here’s how:
| Investment Amount | Approx. Annual Interest Rate | Estimated Monthly Return |
| ₹1,50,000 | 7.4% | ₹925 |
| ₹3,00,000 | 7.4% | ₹1,850 |
| ₹5,55,555 | 7.4% | ₹3,426 |
| ₹9,00,000 (joint) | 7.4% | ₹5,550 |
Note: The “₹22,222/month from ₹5,55,555” claim appears inflated. Based on the current rate (around 7.4%), the realistic monthly return is closer to ₹3,426. Always verify the current interest rate from India Post before investing.
Step-by-Step Application Process
Here’s how you can open a POMIS account:
Visit the nearest Post Office: Choose a branch with savings services.
Fill Application Form: Collect and complete the POMIS account opening form.
Submit KYC Documents: PAN, Aadhaar, passport-sized photo, and address proof.
Open a Post Office Savings Account: Mandatory to credit monthly interest.
Make the Deposit: Pay via cheque or demand draft for the chosen amount.
Account Opened: Get the passbook and account confirmation.
Risks and Limitations of POMIS
Though secure, POMIS is not without its limitations:
| Risk/Drawback | Explanation |
| Fixed Interest Rate | Locked in for 5 years regardless of market changes |
| Inflation Impact | Interest may not outpace inflation over time |
| Taxable Interest | Earnings are taxed as per your income slab |
| No Tax Deduction | No benefits under Section 80C |
| Premature Exit Penalty | Early closure charges apply after 1 year of investment |
| Investment Cap | Limits the higher income potential due to the maximum investment cap |
Comparison with Other Investment Options
Here’s how POMIS compares with other popular low-risk schemes:
| Scheme Name | Monthly Income (₹) | Tax Benefits | Risk Level | Lock-in |
| POMIS | ~₹3,426 (on ₹5.55L) | No | Low | 5 years |
| Bank FD (5-yr, Tax Saving) | Varies | Yes (80C) | Low | 5 years |
| Senior Citizen Savings Scheme | ~₹7,500/month | Yes (80C) | Low | 5 years |
| Atal Pension Yojana | ₹1K–₹5K (on maturity) | Yes | Low | Till 60 |
| Mutual Funds (Debt) | Market-dependent | Yes (80C) | Moderate | Flexible |
Things to Consider Before Investing
- Before locking in your savings, ask yourself:
- Do I need a stable monthly income or long-term growth?
- Can I wait for 5 years without needing the principal amount?
- Am I okay with taxable returns?
- Is capital protection more important than higher returns?
For those who prioritize safety, POMIS is a suitable option. For tax-saving or inflation-beating returns, alternatives like ELSS or PPF may be better.
Final Verdict on POMIS
The Post Office Monthly Income Scheme is an excellent option for conservative investors looking to receive a steady income with minimal risk. It’s particularly suitable for:
Retirees who want a stable pension-like monthly payout.
Homemakers and professionals seeking supplementary income.
Parents looking to save for their children with guardianship accounts.
However, do keep in mind the interest rate, taxability, and inflation impact when planning your finances. For long-term wealth creation, combine POMIS with other schemes like PPF or mutual funds.