Post Office Monthly Income Scheme (POMIS)

Quick Details: POMIS

This table gives a quick overview of the Post Office Monthly Income Scheme.

POMIS Interest Rate in 2026

The interest rate for POMIS is set by the Government and remains fixed for the entire tenure once you open an account, ensuring predictable monthly income.

1. Current POMIS Interest Rate

   The Post Office Monthly Income Scheme currently offers an interest rate of 7.4% per annum, paid on a monthly basis. These rates are reviewed every quarter by the Ministry of Finance. However, once you invest, the applicable rate at the time of opening remains unchanged for the full five-year tenure. Any future revisions will apply only to new accounts.

2. Historical POMIS Interest Rates

   Quarter / Year	Interest Rate (% p.a.)	Payout Frequency
   Q2 FY 2026-27 (Jul-Sep 2026)	7.40%	Monthly
   Q1 FY 2026-27 (Apr-Jun 2026)	7.40%	Monthly
   Q4 FY 2025-26 (Jan-Mar 2026)	7.40%	Monthly
   Q3 FY 2025-26 (Oct-Dec 2025)	7.40%	Monthly
   Q2 FY 2025-26 (Jul-Sep 2025)	7.40%	Monthly
   FY 2024-25	7.40%	Monthly
   FY 2023-24	7.40%	Monthly
   FY 2022-23	6.60% - 7.10%	Monthly
   FY 2021-22	6.60%	Monthly

POMIS Investment Limits

POMIS sets clear minimum and maximum deposit limits to regulate investments across individual and joint accounts.

• Minimum Deposit: ₹1,000, with additional deposits in multiples of ₹1,000.
• Maximum (Single Account): Up to ₹9,00,000 per individual.
• Maximum (Joint Account): Up to ₹15,00,000 shared equally among all holders.
• Minor Accounts: Maximum limit of ₹3,00,000 for accounts in a minor's name.
• Overall Cap: An individual's total investment across all POMIS accounts cannot exceed ₹9 lakh. In joint accounts, each holder's share is counted individually towards this limit.

Who Can Open a POMIS Account?

POMIS is available only to eligible resident individuals under defined categories.

• Resident Individuals: Adult Indian residents can open accounts individually or jointly.
• Joint Accounts: Up to three adults can open a joint account with equal ownership.
• Minors (10 years and above): Can open and operate accounts independently.
• Minors (Below 10 years): Accounts can be opened by a parent or legal guardian.
• Not Eligible: NRIs, HUFs, trusts, and corporate entities are not permitted to invest.

Documents Required to Open a POMIS Account

A few important documents are required to open a POMIS account. Below is the list of the required documents:

• Identity Proof: Aadhaar, PAN, Passport, Voter ID, or Driving Licence.
• Address Proof: Aadhaar, Passport, Ration Card, or utility bill.
• Application Form: POMIS account opening form (Form SB-3).
• Photographs: Two recent passport-sized photographs.
• PAN and Aadhaar: Mandatory for KYC and tax compliance.

Ensure all documents are self-attested and originals are available for verification.

How to Open a POMIS Account

Opening a POMIS account involves a straightforward process through India Post.

1. Open a Post Office Savings Account if you do not already have one.
2. Fill out the POMIS application form with deposit amount, account type, and nominee details.
3. Submit required KYC documents along with photographs.
4. Deposit the investment amount via cash or cheque.
5. Set up ECS or standing instructions to receive monthly interest payouts directly in your bank or post office savings account.

POMIS Nomination and Death Settlement Rules

Nomination ensures smooth transfer of funds in case of the POMIS account holder's demise.

• Nomination Facility: Can be added during account opening or updated later at no cost.
• In Case of Death:
  • The nominee or legal heir submits a claim with supporting documents.
  • The account is closed without penalty.
  • Interest is paid up to the preceding month of closure.
  • The full principal amount is transferred to the nominee or legal heir.

Premature Withdrawal Penalties on POMIS

POMIS accounts carry a mandatory 1-year lock-in period. Early exits incur predefined principal deductions:

What Happens at Maturity in POMIS?

At the end of the 5-year tenure, POMIS accounts follow a defined closure and reinvestment process, ensuring continuity of income if required.

• Maturity Period: The account matures exactly 5 years from the date of opening.
• Closure Process: To close the account, submit the physical passbook along with the account closure form (SB-7B) at the post office branch where the account is held.
• Reinvestment Option: After maturity, you may reinvest the principal into a new POMIS account at the prevailing interest rate applicable at that time.
• Post-Maturity Interest: If the funds are not withdrawn or reinvested, they earn the standard post office savings account interest rate (currently 4.0% per annum) for up to two years. No POMIS interest is payable beyond the original 5-year term.

Transferring Your POMIS Account

POMIS accounts can be transferred easily between post office branches across India without any charges. If you change your location, you can request a transfer by submitting Form SB-10(b) or a written application along with your passbook and updated address proof. The account number and maturity date remain unchanged after transfer.

Tax on POMIS Interest

The interest earned under POMIS is taxable and must be reported in your annual income.

• Tax Treatment: Monthly interest is treated as 'Income from Other Sources' and taxed as per your applicable income tax slab.
• No Section 80C Benefit: Investments made in POMIS do not qualify for deductions under Section 80C.
• No TDS Deduction: No Tax Deducted at Source (TDS) is applied by India Post on interest payments.

Important: Even though TDS is not deducted, the interest is not tax-free. You are required to declare it in your Income Tax Return and pay any applicable tax.

POMIS Benefits

POMIS offers a range of features that make it suitable for conservative investors seeking steady income.

• Capital Protection: Backed by the Government of India, ensuring a high level of safety for invested funds.
• Regular Monthly Income: Provides fixed monthly payouts, making it suitable for retirees and those seeking stable cash flow.
• Low Investment Requirement: Minimum deposit starts at ₹1,000, making it accessible to a wide range of investors.
• Joint Account Facility: Allows joint investments up to ₹15 lakh, enabling shared income planning.
• Nationwide Portability: Accounts can be transferred seamlessly between post office branches across India.

Is Investing in POMIS Risky?

POMIS offers sovereign-backed capital protection, but investors should be aware of certain financial risks that can affect real returns over time. Your principal investment carries no default risk as it is backed by a Government guarantee. However, factors such as inflation, reinvestment conditions, and taxation can reduce the effective value of returns.

1. Risks You Actually Carry

   1. Inflation Risk: With a fixed return of 7.4%, rising inflation can reduce the real purchasing power of your monthly income over time.
   2. Reinvestment Risk: After the 5-year tenure, prevailing interest rates may be lower, affecting future income if you reinvest.
   3. Liquidity Constraints: The investment is locked in for the first year, and premature withdrawals between years 1 and 5 attract penalties.
   4. Allocation Limits: Investment caps may restrict deployment for investors seeking to allocate larger amounts.

2. Drawbacks to Consider

   • Tax Impact: Interest is taxed as per your income slab, which can significantly reduce effective returns for higher-income investors.
   • No Capital Appreciation: The principal remains unchanged, with no scope for growth beyond fixed interest payouts.
   • No Tax Benefits: Unlike some other small savings schemes, POMIS does not offer deductions under Section 80C.

POMIS Compared with Other Options

POMIS differs from other income-generating instruments primarily in how returns are determined and maintained over time.

Why POMIS Returns Differ from Other Monthly Income Schemes?

POMIS interest rates are linked to Government Security (G-Sec) yields and are revised quarterly. However, once you invest, the rate remains fixed for the full five-year tenure. In contrast, bank fixed deposits are subject to renewal rate changes, and mutual fund Systematic Withdrawal Plans (SWPs) depend on market performance, making their returns variable.

Is POMIS a Good Choice for You?

The Post Office Monthly Income Scheme is best suited for conservative investors, retirees, and individuals who require a stable and predictable monthly income without exposing their capital to market unpredictability.

However, individuals aged 60 and above should first consider the Senior Citizen Savings Scheme (SCSS). SCSS typically offers a higher interest rate of 8.20% per annum, a larger investment limit of up to ₹30 lakh, and tax benefits under Section 80C. A practical retirement approach for senior citizens is to utilise the full ₹30 lakh limit in SCSS initially, and then allocate any remaining surplus into POMIS.