Post Office Monthly Income Scheme is among the Most highest-earning investment Tools offered by the Finance Ministry of the Nation. It helps investors to spend in a predetermined interest rate, such as a fixed tenure and creates monthly premiums.
Very similar to other Post Office schemes, the government backs up the post Office MIS scheme. The autonomous guarantee ensures yields and makes the scheme danger free. In the present access to wide-ranged investment alternatives, Post Office Monthly Income Scheme retains incidence owing to its guaranteed returns and very low risk.
Post Office Monthly Income Scheme
Post Office Monthly Income Scheme (POMIS) one of a host of banking Services and Products, under the purview of the Finance Ministry. Consequently, it’s highly dependable. It’s a low-risk MIS and creates a steady income. You may spend up to Rs. 4.5 lakhs separately or Rs. 9 lakhs collectively, and also the investment period is 5 decades. Capital protection is the principal objective.
For example, if Sharma has spent Rs. 4.5 lakhs at the post office monthly investment scheme for five decades. His monthly income will probably be Rs.2,475 for this interval. Post-maturity he could draw his 4.5 lakhs, either in the post office or make it to his own savings account through Electronic Clearance Service.
Launching a Post Office Monthly Income Scheme Account is simple and hassle-free. But to spend in the scheme, you Have to Have a Post Office Savings Account. After launching a savings account with the Post Office — in case you didn’t already have one — you can adhere to the following process —
POMIS Account Opening Process
- Submit the form along with these records – photocopy of ID evidence, photocopy of speech evidence, 2 passport-sized photos.
- Submit the originals to your files mentioned above for confirmation purposes.
- Collate signatures of inheritance or witnesses.
- It’s possible to spend the funds amount via an obsolete cheque. The date mentioned on the cheque is going to be deemed as the account opening date. The interest earned on the investment is going to be disbursed a month out of the opening date.
- The beneficiary may also be nominated following launching the Post Office Monthly Income Scheme in India account.
Features of POMIS
Lock-in interval: When you start an Monthly Income Scheme account using a post office, you can’t withdraw the amount deposited into this account before five decades.
Maximum limitation: You may produce a maximum investment of Rs. 4.5 Lakh from the scheme. Even in the event that you hold the scheme from several post offices, the aggregate of your deposit can’t exceed Rs. 4.5 Lakh.
In case of joint accounts also, the talk of your investment needs to be within the designated limit. The best limit for small accounts is Rs. 3 Lakh. The minimum amount that may be spent is Rs. 1,500 for any person.
Transferrable: In case, you’re altering your home status to another town any place in India, it is possible to move your POMIS account into some suitable post office.
Joint account: A maximum of 3 people can start a joint account for this particular scheme. In case of joint accounts, every investor owns equal rights within the account. The utmost limit in the event of joint accounts is Rs. 9 Lakh, and striking limitation is Rs. 4.5 Lakh.
Minor account: You are able to open a POMIS little account in the title of your son or daughter. He/she could withdraw the amount following maturing to 18 decades.
Eligible residential status: Each Indian citizen is qualified to start a POMIS accountnonetheless, NRI people can’t.
Auto-withdrawal: You can choose to draw the monthly interest amount in your investment via automatic transfer to a savings account via PDCs or ECS. In case the POMIS account is using a CBS Post Office, then the interest amount could be directed at another CBS centric savings account.
Penalty: In the event you want to draw your investment corpus prior to the lapse of this lock-in interval, a penalty is charged on the withdrawal amount based on the time of such salvation.
Should you redeem your investment over the 1st and 3rd year, then a 2% penalty is charged. If you redeem over the 3rd and 5th year, then a 1 percent penalty is charged.
Tax advantages: The interest amount doesn’t incur any Tax Deducted at Source (TDS); nonetheless, it also doesn’t draw any tax benefits under Section 80C.
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Advantages of Post Office Monthly Income Scheme (POMIS)
There are two big advantages to investing in POMIS. As it isn’t a market-linked investment scheme and can be ensured by the authorities, it’s a go-to alternative for many investors using a low-risk desire. These advantages are —
Steady yields: You’d make a steady stream of income each month in your investment corpus no matter market changes. An interest rate of 7.6percent p.a. is fixed from the post office.
Then every month, her interest income in the exact same will be Rs. 2,533.
Reinvestment: You can opt to commit the interest gained into high-profit yielding securities like equity stocks, equity finance nonetheless, these investment choices also entail higher risk.
Hybrid capital, including both equity capital and fixed income instruments, are a viable choice to take part in the stock exchange, create a diverse investment portfolio, earn relatively higher yields and reduce risk in comparison to equity stocks and funds.
You could also reinvest the money from Post Office Recurring Deposit, a feature recently added by Post Office.
Disadvantages of POMIS
- Post Office Monthly Income Scheme doesn’t offer you any tax rebate under section 80C. In other words, the amount invested in POMIS isn’t tax deductible.
- In the event the monthly premiums aren’t withdrawn, they sit idle and don’t return any interest.
- There’s not any TDS on the Post Office MIS, but the interest income is taxable on your hands.
Eligibility Criteria
Following people are eligible to avail the scheme-
- NRIs Aren’t qualified to invest in this scheme
- Person of or over Age of 10 years
Why Should Invest?
- Post Office Monthly Income Scheme is acceptable for investors that are looking for fixed monthly income but are reluctant to accept some risks in their investments. Thus, it is more favourable for retired people or senior citizens that have landed to the no-more-paycheck zone
- It’s Acceptable for the investors looking for a one-time investment to serve the purpose of getting regular income to maintain the lifestyle
- Investors Keen to Create long-term investments
How to open a POMIS Account
Launching a post office monthly income scheme is much less tedious as you might believe. Before imagining long-term and more paperwork, please have a peek at the incremental process.
- Open a post office savings account, in case you have not already.
- Gather a POMIS program form in the post office.
- Submit the duly filled form together with a Xerox copy of your ID, residential evidence and two passport-size photos in the post office. Please do remember to take the originals for verification.
- You’ll have to receive the signatures of your watch or nominee(s) about the form.
- Create the first deposit through cash or money. If you provide a post-dated cheque, this date will be regarded as the account opening date.
- Launching a POMIS account demands hardly any documentation. Ensure to have these documents as you submit an application to your scheme.
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Documentation Required for POMIS Account
- Identity proof
- Address proof
- Passport size photo
There are two big advantages to investing in POMIS. As it isn’t a market-linked investment scheme and can be ensured by the authorities, it’s a go-to alternative for many investors using a low-risk desire. These advantages are —
Steady yields: You’d make a steady stream of income each month in your investment corpus no matter market changes. An interest rate of 7.6percent p.a. is fixed from the post office.
Then every month, her interest income in the exact same will be Rs. 2,533.
Reinvestment: You can opt to commit the interest gained into high-profit yielding securities like equity stocks, equity finance nonetheless, these investment choices also entail higher risk.
Hybrid capital, including both equity capital and fixed income instruments, are a viable choice to take part in the stock exchange, create a diverse investment portfolio, earn relatively higher yields and reduce risk in comparison to equity stocks and funds.
You could also reinvest the money from Post Office Recurring Deposit, a feature recently added by Post Office.
Disadvantages of POMIS
- Post Office Monthly Income Scheme doesn’t offer you any tax rebate under section 80C. In other words, the amount invested in POMIS isn’t tax deductible.
- In the event the monthly premiums aren’t withdrawn, they sit idle and don’t return any interest.
- There’s not any TDS on the Post Office MIS, but the interest income is taxable on your hands.
Eligibility Criteria
Following people are eligible to avail the scheme-
- NRIs Aren’t qualified to invest in this scheme
- Person of or over Age of 10 years
Why Should Invest?
- Post Office Monthly Income Scheme is acceptable for investors that are looking for fixed monthly income but are reluctant to accept some risks in their investments. Thus, it is more favorable for retired people or senior citizens that have landed to the no-more-paycheck zone
- It’s Acceptable for the investors looking for a one-time investment to serve the purpose of getting regular income to maintain the lifestyle
- Investors Keen to Create long-term investments
How to open a POMIS Account
Launching a post office monthly income scheme is much less tedious as you might believe. Before imagining long-term and more paperwork, please have a peek at the incremental process.
- Open a post office savings account, in case you have not already.
- Gather a POMIS program form in the post office.
- Submit the duly filled form together with a Xerox copy of your ID, residential evidence and two passport-size photos in the post office. Please do remember to take the originals for verification.
- You’ll have to receive the signatures of your watch or nominee(s) about the form.
- Create the first deposit through cash or money. If you provide a post-dated cheque, this date will be regarded as the account opening date.
- Launching a POMIS account demands hardly any documentation. Ensure to have these documents as you submit an application to your scheme.
FAQ’s Related to POMIS
Q1: How do I withdraw cash from my POMIS account following the tenure?
Ans : It’s possible to draw the deposited amount in the account from the post office or you could also get it imputed on your savings account via ECS. It’s possible to stick to the typical manner and draw the amount monthly. On the other hand, the investor is permitted to allow some amount collect and draw it all together after a couple of months.
Q2: Could I move POMIS account?
Ans: Yes, your account could be moved from 1 post office to another for completely free.
Q3: Can I reinvest my accumulated amount in POMIS?
Ans: This is only one of the greatest characteristics of this scheme. It helps the investors to reinvest their gathered cash in the conclusion of the tenure.
However, the interests left are taxable.
Q5: Can there be any nomination facility readily available in POMIS?
Ans: Yes, the scheme lets you choose and create a nominee from the account who will find the accumulated amount in the event of unfortunate death.
Q8: From where do I get the withdrawal kind of POMIS?
Ans: You can find the withdrawal form straight from the post office or download it in the India Post site.
Q9: What occurs when the investor doesn’t withdraw the money after 5 decades?
Ans: Following the maturity of five decades, when the investor doesn’t draw the amount, then he’ll continue to make a easy interest for as many as two years (according to the post office savings account interest rate).
Q10: Why Is Premature Withdrawal of those POMIS allowed?
Ans : Yes, the early withdrawal facility is permitted after 1 year, but until 3 years in the reduction of 2% of this deposit and also after 3 years in the reduction of 1% of their deposit. Nevertheless, here the reduction usually means that the deduction from the deposit.
