The Post Office Monthly Income Scheme (POMIS) is one of India’s most trusted savings schemes for people who want a safe investment with regular monthly income. Backed by the Government of India, this scheme allows investors to deposit a lump sum amount and earn fixed monthly interest for a period of five years.
With an interest rate of 7.40% per annum for FY 2025–26, POMIS is especially popular among retirees, senior citizens, and conservative investors who prefer stability over market-linked returns.
Latest POMIS Interest Rate (2025–26)
For the current financial year, the government has kept the POMIS interest rate unchanged.
- Interest Rate: 7.40% per annum
- Interest Payment: Monthly
- Tenure: 5 years
- Risk Level: Very low (government-backed)
The interest amount is paid every month and can be credited directly to your Post Office Savings Account or transferred to your bank account through ECS.
What Is the Post Office Monthly Income Scheme?
POMIS is a fixed-income savings scheme offered by India Post. It is designed for individuals who want:
- Predictable monthly income
- Capital safety
- Low investment risk
Unlike equity or mutual funds, returns under POMIS do not depend on market performance. Once you invest, the interest rate remains fixed for the entire tenure.
At maturity, the original invested amount is returned, and investors can either withdraw or reinvest it.
How Does POMIS Work? (Example Explained)
Let’s understand this with a simple example:
- Investment Amount: ₹9,00,000
- Interest Rate: 7.40% per annum
- Annual Interest: ₹66,600
- Monthly Interest: ₹5,550
This ₹5,550 is paid every month for five years. The investor continues to receive this income without touching the principal, which is returned at maturity.
Key Features of the Post Office Monthly Income Scheme
Government-Backed Safety
POMIS is supported by the Government of India, ensuring complete protection of your invested capital.
Regular Monthly Income
Interest is paid every month, making it suitable for meeting household expenses or retirement needs.
Fixed Tenure
The scheme has a fixed lock-in period of 5 years, providing financial discipline.
Low Entry Requirement
Accounts can be opened with as little as ₹1,000, and further deposits can be made in multiples.
Multiple Account Options
You can open:
- A single account
- A joint account (up to 3 adults)
- An account on behalf of a minor above 10 years
Nomination Facility
Nominees can easily claim the deposit and interest in case of the account holder’s death.
Reinvestment Option
After maturity, the amount can be reinvested for another five years.
POMIS Investment Limits
| Account Type | Maximum Investment |
|---|---|
| Single Account | ₹9 lakh |
| Joint Account | ₹15 lakh |
In joint accounts, all account holders have equal ownership. An individual cannot exceed ₹9 lakh across all POMIS accounts combined.
Eligibility Criteria for POMIS
To open a POMIS account:
- Applicant must be a resident Indian
- NRIs are not eligible
- Any adult can open an account
- Minors above 10 years can have an account via a guardian
- On attaining 18 years, minors must convert the account into their own name
Interest Payment Rules
- Interest is paid monthly, starting one month after account opening
- Unclaimed interest does not earn additional interest
- Interest is fully taxable
- Excess deposits are refunded with savings account interest
Taxation of POMIS
- Investment is not eligible under Section 80C
- Monthly interest is added to taxable income
- TDS may apply as per income tax rules
Because of this, POMIS is better suited for investors prioritizing income stability rather than tax savings.
Who Should Invest in POMIS?
POMIS is suitable for:
- Retired individuals
- Senior citizens (below SCSS limit)
- Risk-averse investors
- People seeking guaranteed monthly income
- Investors avoiding market volatility
How to Open a POMIS Account
The process is simple and offline:
- Open a Post Office Savings Account
- Collect the POMIS application form
- Fill in personal, nominee, and account details
- Submit ID proof, address proof, and photographs
- Deposit money via cash or cheque
- Receive your POMIS passbook
Premature Withdrawal Rules
| Withdrawal Time | Penalty |
|---|---|
| Before 1 year | No interest paid |
| 1–3 years | 2% deduction |
| 3–5 years | 1% deduction |
Premature closure requires submitting a written request along with the passbook.
POMIS Compared With Other Monthly Income Options
POMIS offers stable and predictable returns, unlike mutual funds which are market-linked or insurance plans that come with long lock-in periods and surrender charges.
Historical POMIS Interest Rates
The interest rate has remained stable over the years, reflecting reliability:
- 2025–26: 7.40%
- 2024–25: 7.40%
- 2023–24: 7.40%
- 2022–23: 7.10%
Final Overview
The Post Office Monthly Income Scheme (POMIS) is a dependable savings option for individuals who want regular income with minimal risk. While it does not offer tax deductions, its safety, fixed returns, and government backing make it an excellent choice for conservative investors.