Post Office Monthly Income Scheme: Features, Rules and Tenure

Account types and deposit limits

• Single account: Opened by an individual adult with deposits up to the notified ceiling under central small savings rules.
• Joint account: Opened jointly by up to three adults, offering equal share in investment and monthly interest payouts with double the single account deposit ceiling.
• Minor accounts: Can be opened by a parent or legal guardian on behalf of a minor, or by a minor who has reached 10 years of age in their own name.

Interest payment structure and 5-year tenure

POMIS has a fixed maturity period of 5 years from the date of opening. The interest rate is notified on a quarterly basis by the Ministry of Finance. Once opened, the contracted interest rate remains locked and constant for the entire 5-year tenure. The interest is automatically credited every month into the depositor's post office savings account or linked bank savings account.

Premature withdrawal and tax guidelines

• No withdrawal is permitted within the first 1 year of deposit.
• Withdrawals between 1 and 3 years incur a nominal 2% deduction from the principal deposit as per government rules.
• Withdrawals between 3 and 5 years incur a nominal 1% deduction from the principal amount.
• Interest income is taxable under applicable personal income tax slabs, with no Tax Deducted at Source (TDS) by India Post.

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Common questions

General guidance, not personal advice. For your farm, ask your local Krishi Vigyan Kendra or agriculture officer.