Post Office 5-year FD vs POMIS: What will be your returns over 5 years on Rs 4.5 lakh investment
A detailed comparison between Post Office 5-Year Fixed Deposit (FD) and Post Office Monthly Income Scheme (MIS), exploring eligibility, deposit limits, interest rates, and returns on a Rs 4.5 lakh investment over five years.
Investing wisely in secure options like the Post Office's 5-Year Fixed Deposit (FD) and Monthly Income Scheme (MIS) can provide predictable returns and tax benefits. This guide examines these two popular schemes in-depth, focusing on eligibility, investment limits, interest rates, premature closure conditions, and the total returns you can expect on a Rs 4.5 lakh investment over a five-year period. Whether you're seeking consistent monthly income or long-term savings, this comparison will help you choose the best fit for your financial goals.
Post Office 5-Year Fixed Deposit (FD)
Eligibility:
- Single adult
- Joint Account (up to three adults - Joint A or Joint B)
- Guardian on behalf of minor or person of unsound mind
- Minor above ten years in their own name
- Note: Multiple accounts allowed
Deposit Details
- Account options for 1, 2, 3, and 5 years
- Minimum: Rs 1,000; multiples of Rs 100 with no upper limit
- Interest paid annually (not compounded if unclaimed)
- 5-year FD qualifies for 80C tax benefit
Maturity and Extensions
- Repayment on term expiry (1, 2, 3, or 5 years)
- Account can be extended for the same period initially chosen, with request during specified periods (6 months for 1-year, up to 18 months for 5-year)
- Interest rate for the extension period follows the rate on the day of maturity
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Premature Closure:
- Allowed after six months; penalty varies:
- After 1 year: 2% less than the applicable TD rate
- After 6 months but before 1 year: Savings Account rate applies
Returns
- Investment: Rs 4.5 lakh
- Estimated Returns: Rs 2,02,477
- Total Value: Rs 6,52,477
Post Office Monthly Income Scheme Account (MIS)
Eligibility:
- Single adult
- Joint Account (up to three adults - Joint A or Joint B)
- Guardian on behalf of minor or person of unsound mind
- Minor above ten years in their own name
Deposit Limits
- Minimum: Rs 1,000; multiples of Rs 1,000
- Maximum: Rs 9 lakh (single) and Rs 15 lakh (joint)
- Joint accounts share investment equally
Interest Details:
- Paid monthly; no additional interest on unclaimed interest
- Interest credited to linked savings or ECS at CBS Post Offices
- Interest taxable for the depositor
Premature Closure
- Allowed after 1 year:
- Deduction of 1% if closed between 3-5 years
- Deduction of 2% from principal if closed between 1-3 years
Maturity
Closes on 5-year expiry, with refund options for nominee/heirs in case of the account holder's death
Returns
- Investment: Rs 4.5 lakh
- Estimated Monthly Income: Rs 2,775