Post Office Monthly Income Scheme: How to earn Rs 5,550, Rs 7,400 or Rs 9,250 monthly income by investing in this post office scheme; calculations will surprise you
Monthly Income Scheme (MIS) at Post Office: Did you know that you can earn monthly interest ranging from Rs 6 to Rs 9,250 for five years against a one-time deposit to the tune of Rs 1,000-15,00,000 in a special, guaranteed income small savings scheme at the post office? Formally known as the National Savings Monthly Income Account (MIS), this savings plan enables depositors to park their funds to earn interest every month for the entire maturity period of five years. And what is the interest rate of the MIS plan? Currently, the scheme delivers a return of 7.4 per cent (paid monthly). Read on to learn all about this investment plan with examples.
Post Office Monthly Income Scheme (MIS), Post Office Monthly Income Account: Did you know that the National Savings Monthly Income Scheme (MIS), popularly known as the Post Office Monthly Income Scheme, is one of the several government-backed, guaranteed-income schemes that enable investors to save for a regular monthly income upon maturity? As of the quarter ending March 31, investment in a Post Office Monthly Income Scheme account delivers a return of 7.4 per cent, according to the India Post website, indiapost.gov.in.
So what kind of monthly rewards can you expect from this post office small savings scheme? The post office MIS scheme enables investors to get a maximum monthly income of Rs 5,550 in a single account and Rs 9,250 in a joint account, according to the post office website.
Here are 10 key things to know about the Post Office Monthly Income Scheme (MIS):
1. How does it work?
The Monthly Income Scheme enables an investor to make a one-time deposit to receive the return spread over monthly payments that essentially work like a monthly pension.
ALSO READ | SIP+SWP: Start with 5K SIP and then get Rs 93.80K pension for 30 years; know calculations
This is in contrast to drawing the sum of principal and applicable accumulated interest in a single payment at the end of the maturity period as in the case of a fixed deposit.
2. How many individuals can invest jointly?
The fixed monthly pension scheme allows up to three adults to invest jointly.
3. Investment limit
One can invest a minimum of Rs 1,000 in the Monthly Income Scheme, and a maximum of Rs 9 lakh singly and Rs 15 lakh jointly.
4. Interest rate
Just like all small savings scheme, the interest rate applicable to the Monthly Income Scheme is reviewed every quarter. For the final quarter of the financial year 2023-24, the MIS interest rate stands at 7.4 per cent, compounded annually and paid monthly.
5. When is the interest paid?
The interest is paid on the completion of a month from the date of opening, and so on till maturity. Any unclaimed interest in the account does not yield additional interest.
6. Maturity period
The Monthly Income Scheme account comes with a maturity period of five years.
7. What happens after maturity?
Upon maturity, the monthly rewards stop and the principal is returned to the depositor.
8. Is premature withdrawal permitted?
While no deposit is allowed to be withdrawn before the completion of one year from the date of deposit, a premature closure before the full maturity period of the scheme leads to certain deductions from the principal.
A closure:
- Between one and three years from the date of account opening leads to a deduction of 2.0 per cent
- Between three and five years from the date of account opening leads to a deduction of 1.0 per cent
ALSO READ: How NPS investment can help you pay zero tax on Rs 10 lakh salary; examples included
9. How to apply for a premature closure?
A depositor can apply for a premature closure by submitting a prescribed application form along with the passbook at the concerned post office branch.
10. Examples
And now, the calculations. Here are a few examples to illustrate what kind of investment you need to receive your desired monthly income under the Post Office Monthly Income Scheme:
One-time deposit | Monthly income |
Rs 10,000 | Rs 62 |
Rs 20,000 | Rs 123 |
Rs 30000 | Rs 185 |
Rs 50,000 | Rs 308 |
Rs 75,000 | Rs 462.5 |
Rs 1,00,000 | Rs 617 |
Rs 1,50,000 | Rs 925 |
Rs 1,75,000 | Rs 1,079 |
Rs 2,00,000 | Rs 1,233 |
Rs 2,50,000 | Rs 1,542 |
Rs 3,00,000 | Rs 1,850 |
Rs 4,00,000 | Rs 2,467 |
Rs 5,00,000 | Rs 3,083 |
Rs 7,00,000 | Rs 4,317 |
Rs 8,00,000 | Rs 4,933 |
Rs 9,00,000 | Rs 5,550 |
Rs 10,00,000 | Rs 6,167 |
Rs 10,50,000 | Rs 6,475 |
Rs 11,00,000 | Rs 6,783 |
Rs 11,50,000 | Rs 7,092 |
Rs 12,00,000 | Rs 7,400 |
Rs 12,50,000 | Rs 7,708 |
Rs 13,00,000 | Rs 8,017 |
Rs 13,50,000 | Rs 8,325 |
Rs 14,00,000 | Rs 8,633 |
Rs 14,50,000 | Rs 8,942 |
Rs 15,00,000 | Rs 9,250 |
The examples given above are indicative based on the current interest rate and the compounding method as per the India Post website.
ALSO READ: NPS: How Rs 10,000 monthly contribution may get you Rs 1.53 lakh pension a month; know calculations
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Retirement Planning: SIP+SWP combination; Rs 15,000 monthly SIP for 25 years and then Rs 1,52,000 monthly income for 30 years
Top Gold ETF vs Top Large Cap Mutual Fund 10-year Return Calculator: Which has given higher return on Rs 11 lakh investment; see calculations
Retirement Calculator: 40 years of age, Rs 50,000 monthly expenses; what should be retirement corpus and monthly investment
SBI 444-day FD vs Union Bank of India 333-day FD: Know maturity amount on Rs 4 lakh and Rs 8 lakh investments for general and senior citizens
Home loan EMI vs Mutual Fund SIP Calculator: Rs 70 lakh home loan EMI for 20 years or SIP equal to EMI for 10 years; which can be easier route to buy home; know maths
Power of Compounding: How many years it will take to reach Rs 2 crore corpus if your monthly SIP is Rs 3,000, Rs 4,000, or Rs 5,000
10:02 AM IST