Post Office Monthly Income Scheme (POMIS): Interest Rate, Benefits & Eligibility

POMIS is a government scheme for people who want steady monthly income from a lump sum. You deposit once, and every month a fixed interest amount lands in your account. It is used alot by Retirees and people who don't wish to invest in the stock market. Here's the rate, the rules, and who it actually works.

What is the Post Office Monthly Income Scheme?

POMIS is run by India Post, backed by the Ministry of Finance. You put in a lump sum once, the account runs for 5 years, and you get paid interest every single month.

Interest is calculated yearly but paid monthly, straight into your linked Post Office Savings Account. No market movement touches it. No surprises. At the end of 5 years you get your original deposit back and can either walk away or open a fresh account. Since it's government-run, there's basically no risk to your principal.

Key features of POMIS

Current rate: 7.4% per annum, for the April-June 2026 quarter. 

This gets reviewed every quarter, but once you open your account, your rate is locked for the full 5 years no matter what changes later.

Minimum investment is ₹1,000. Maximum is ₹9 lakh for a single account, ₹15 lakh for a joint one (up to three people). You can open more than one account, but your total across all of them can't cross the above mentioned limits. First payout comes a month after you invest, not immediately. You can collect it in cash at the post office or set up auto-transfer to your savings account. No Section 80C benefit here, and the interest you earn is fully taxable.

Post Office MIS Interest Rate 2026 and Monthly Income Calculation

The mis interest rate in post office is 7.4% right now, same as last quarter. Rates get reset every three months based on bond yields, but your locked-in rate doesn't move for your entire 5-year term once you've invested.

Since the post office mis scheme pays out monthly, your yearly interest just gets split into 12 equal chunks. The math: (amount invested × annual rate) ÷ 12.

Example. Invest ₹5,00,000 at 7.4%, and your annual interest is ₹37,000. That's about ₹3,083 a month. Push it to the ₹9 lakh ceiling for a single account, and you're getting roughly ₹5,550 a month. Max out a joint account at ₹15 lakh, and that's about ₹9,250 a month. Once locked in, these numbers don't shift for 5 years. That's the whole appeal.

Post Office MIS Calculator – How to Estimate Monthly Returns

A post office MIS calculator saves you the manual math. Punch in your investment amount, current rate, and tenure, and it spits out your monthly payout instantly.

Formula: Monthly Income = (Investment Amount × Annual Rate) ÷ 12

Invest ₹3,00,000 at 7.4%, and you're looking at about ₹1,850 a month. The only real variables here are how much you invest and the rate locked in at the time you open the account, since that rate holds for the full 5 years regardless of what happens later.

Running the numbers before you invest helps you plan actual monthly cash flow, whether you're budgeting for expenses or just comparing POMIS to other fixed-income products. Check your expected monthly income on Ventura's MIS calculator before committing your money.

Benefits of investing in POMIS

You know exactly how much lands in your account every month, for 5 straight years. That's the core pitch. Your rate doesn't move, so your income doesn't move either.

Capital safety comes from the fact that it's government-backed. No credit risk. Good fit for retirees or anyone close to retirement. When markets go volatile and equity or mutual fund returns start swinging, POMIS just keeps paying the same amount, month after month, without blinking.

It's low-effort too. No portfolio to rebalance, no charts to watch. Open the account once and the interest shows up on autopilot.

Drawbacks of investing in POMIS

Inflation is the real problem. 7.4% sounds fine today, but if inflation runs hotter than that over your 5-year term, your money's actual buying power shrinks even while the numbers on paper stay the same. Equity can outrun inflation over time. POMIS can't.

Tax works against you too. Interest is fully taxable at your income slab, and there's no TDS deducted upfront, so it's on you to track and report it. No 80C deduction either, so it's not doing you any favours at tax time.

And since the rate is locked, you don't gain anything if rates rise after you've invested. You're stuck with whatever you signed up for. That's the tradeoff for stability.

Who should consider POMIS?

Retirees who need a monthly income to cover regular expenses are the obvious fit. It works almost like a pension top-up. Homemakers managing household budgets like it too, since it's predictable and needs zero active management.

Beyond that, it suits anyone who wants passive income without touching the stock market. Conservative investors, people parking a bonus or inheritance who want it earning something steady rather than sitting idle. It's not built for growing wealth aggressively. It's built for people who just want the same number, every month, without thinking about it.

Comparing POMIS with other investment options

POMIS often matches or beats FD rates, and it actually pays monthly instead of just promising to. SCSS pays more but only if you're a senior citizen. Debt funds are more flexible and can beat POMIS post-tax for some investors, but they carry market risk POMIS just doesn't have. Pick based on your age, risk appetite, and whether you actually need income every month or can wait it out.

Investing in POMIS: a step-by-step guide

Open a POMIS account offline at your nearest post office, or online through net banking if your post office savings account supports it. Fill out the form, submit PAN, Aadhaar, a photo, and address proof.

You can add a nominee right at account opening. Moved cities? Your account can be transferred to another post office without closing it. Once it's active, your first payout hits the following month, either in your linked savings account or collected in person.

Tax Rules Applicable to Post Office MIS

Interest from POMIS gets taxed as "Income from Other Sources," added to your total income and taxed at your slab rate. No Section 80C deduction on your investment amount, full stop.

There's no TDS on POMIS interest. The post office doesn't withhold anything, so declaring and paying tax on it is entirely your job at filing time. Compare that to bank FDs, where TDS usually kicks in automatically past a certain threshold.

Since payouts come monthly, keep a running total across the year so you're not scrambling at tax time. If you're in a higher tax bracket, your real post-tax return drops noticeably below that 7.4% headline number. Factor that in before comparing POMIS against other options.

Tips Before Investing in Post Office MIS

Run the numbers through a POMIS calculator first so you know your real monthly income. Check your tax slab too, since your actual take-home return will be lower than 7.4% once tax is applied.

Compare it against SCSS if you're 60+, or short-term debt funds if you want more flexibility. Remember the 5-year lock-in. Early withdrawal is allowed after a year, but it comes with a penalty, so only put in money you're sure you won't need soon. Always confirm the current quarter's rate directly with your post office before investing, since new rates only apply going forward.

Explore: Good One Time Investment Plans

Conclusion

POMIS turns a lump sum into predictable monthly income, backed by the government. At 7.4%, it's solid for retirees, homemakers, and anyone who wants certainty over growth. But fixed returns and full taxability mean it shouldn't be your only investment. Pair it with something that can actually grow, and you get stability and upside together.