Post Office Monthly Income Scheme: A Complete Guide

Some people do not want their savings to grow quietly in the background. They want it to pay them a fixed amount every single month, like a salary. The Post Office Monthly Income Scheme is built for exactly that. It is a safe, government-backed way to convert a lump sum into a steady monthly income. This guide explains it.

What is the Post Office MIS

The Post Office Monthly Income Scheme, often shortened to POMIS or MIS, is a savings scheme offered through India Post. You deposit a lump sum, and in return the scheme pays you a fixed amount of interest every month. The term is 5 years, and at the end your full original deposit is returned to you.

Because it is backed by the Government of India, the capital is effectively risk-free. It is one of the simplest and safest ways to create a predictable monthly income from savings.

The interest rate and monthly income

The POMIS interest rate is 7.4 percent per annum for the April to June 2026 quarter. The defining feature is that this interest is paid out monthly, giving you a regular, dependable income stream.

The monthly income is simply your deposit multiplied by the annual rate, divided by twelve. The original deposit itself is not touched. It is returned in full when the 5-year term ends.

Deposit limits

POMIS has clear ceilings, and they are lower than some other schemes:

• Maximum for a single account: ₹9 lakh.
• Maximum for a joint account: ₹15 lakh.
• Minimum: ₹1,000.

A joint account, which can have up to three holders, raises the limit to ₹15 lakh. For a couple, opening a joint account is a simple way to deploy a larger sum into the scheme.

Tax treatment

The tax position of POMIS is straightforward, and worth knowing clearly:

• The monthly interest is fully taxable at your income slab rate, and must be declared as income from other sources.
• There is no TDS deducted on POMIS interest, unlike a bank fixed deposit. But the absence of TDS does not make the interest tax-free. You are still responsible for declaring and paying tax on it.
• The deposit does not qualify for Section 80C. Unlike the SCSS or NSC, there is no tax deduction on the amount you invest in POMIS.

POMIS compared with SCSS

POMIS and the SCSS are the two main government schemes for safe, regular income, and they are often considered together.

If you are a senior citizen, the SCSS generally offers a higher rate, a larger limit and an 80C benefit, so it is usually the first choice. POMIS has one advantage the SCSS does not: it is open to any adult, not just senior citizens, and it pays income monthly rather than quarterly. Many retirees use both, since the SCSS limit and the POMIS limit are separate.

Who should use POMIS

• Retirees wanting a safe, predictable monthly income to supplement a pension or the SCSS.
• Anyone needing a regular income from a lump sum, who values certainty over growth.
• Conservative savers who want a government guarantee and a fixed monthly payout.

It is less suitable as a long-term wealth builder. The rate is modest and the interest is fully taxed, so for long-term growth, equity remains the better engine. POMIS is an income tool, not a growth tool.

The Post Office MIS does one thing well: it turns a safe lump sum into a cheque every month. For income with certainty, that is exactly enough.

Work out your monthly income with the Post Office MIS calculator, and if you are a senior citizen, compare it against the SCSS before deciding where the money goes.