Elearnmarkets - Financial Market Learning
  • Categories
    • Basic Finance
    • Derivatives
    • Financial Planning
    • Fundamental Analysis
    • Technical Analysis
    • Marketshala
    • Miscellaneous
  • Language
    • English
    • Hindi
    • Bengali
No Result
View All Result
  • Courses
  • Webinars
  • Learn On Elearnmarkets
Elearnmarkets - Learn Stock Market, trading, investing for Free
  • Categories
    • Basic Finance
    • Derivatives
    • Financial Planning
    • Fundamental Analysis
    • Technical Analysis
    • Marketshala
    • Miscellaneous
  • Language
    • English
    • Hindi
    • Bengali
No Result
View All Result
  • Courses
  • Webinars
  • Learn On Elearnmarkets
Elearnmarkets - Learn Stock Market, trading, investing for Free
No Result
View All Result
Home Basic Finance
All you should know about Post Office Monthly Income Scheme 1

All you should know about Post Office Monthly Income Scheme

Elearnmarkets by Elearnmarkets
October 13, 2022
in Basic Finance
Reading Time: 5 mins read
2
870
VIEWS
Share on FacebookShare on TwitterShare on WhatsApp

The joy of sending old-fashioned, handwritten letters remains unmatched. That is where we think of Post Offices. Sending, receiving letters, courier services- these are the things often associated with post offices. But, we barely think of Post Offices as an institution for investments. Post Office Monthly Income Schemes are often ignored and the sensitization about the same remains very low.

What is Post Office Monthly Income Scheme (POMIS)?

Post Office Monthly Savings Schemes are Government of India backed investment instruments that allow investors to deposit a small sum of money from their savings, and get a stipulated interest rate, based on the current market rates. The scheme effectively transforms the meagre monthly savings into investments with good returns.  This scheme is a great low-risk option for investors who are risk-averse and want a fixed income every month. The majority of the Post Office Monthly Income Scheme account holders are senior citizens who rely on the monthly returns from the scheme for their daily expenses.

There is no stipulated limit on the number of accounts that can be held by an individual investor. When it comes to a sole operating account, the maximum investment that can be allowed in POMIS schemes is 4.5 lakhs and the amount is 9 lakhs in the case of joint account holders(specified limit of maximum 3 holders). In the current market scenario, the interest rate that is paid out is 6.6% and the maturity period of the scheme is 5 years from the opening date of the account. The minimum stipulated amount that should be deposited is 1500 and thereafter multiples of 100.

These schemes also have the option of Nominee, which can be updated after opening the account by a beneficiary. After the demise of the account holder, the benefits of the scheme can be claimed by the nominee. These accounts are freely transferred from one account to another.

How to open a POMIS Account?

The procedure to open a POMIS account is relatively simple and hassle-free, provided the investors have a Post-Office Savings Account. In case the investor does not have a Savings account, they should first apply for the Savings account and do the following:

  1. Procure a POMIS form from the nearest Post Office Branch.
  2. Submit the form along with the necessary documents(generally a Photocopy of ID Proof, Photocopy of address proof, 2 Passport-sized photographs)
  3. Submit the original version of the aforementioned documents for verification.
  4. Collect signatures of the beneficiaries or witnesses.

The initial principal amount can be invested through a dated cheque. The date mentioned on the cheque is considered to be the account opening date. The interest on the principal is disbursed starting from the next month.

Join TMP Join TMP Join TMP

Eligibility for Post Office Monthly Income Scheme:

To avail the features of this scheme, there are certain eligibility criteria:

  1. Only an Indian resident is eligible to open a POMIS account. NRIs cannot avail the benefits of this scheme.
  2. POMIS also has the option to open the account in the name of a minor, provided they are over 10 years of age.
  3. The POMIS account can be easily transferred from one post office branch to another, without any extra charges.

Benefits of Post Office Monthly Income Scheme:

  1. Fixed return every month: No matter what the market conditions are, Post Office Monthly Income Scheme account holders get a stipulated amount every month, with a fixed rate of interest. Hence, this unique scheme is hassle-free and low risk.
  2. Investment option for senior citizens: Instead of having an idle lump sum, investing in POMIS ensures a steady rate of return without any market risks. This reduced uncertainty with a fixed interest rate is a perfect investment instrument for senior citizens.
  3. Reinvestment: The returns from POMIS accounts can be used as further investment in other instruments like equity shares or SIPs. However, these entail market risk and can be avoided by senior citizens. A good option is to reinvest the proceedings into a Post Office Recurring Deposit Account.
  4. No TDS: The interest amount in a POMIS account does not incur any Tax Deducted at Source (TDS).

Restrictions of Post Office Monthly Income Scheme:

With all the benefits that POMIS offers, there are some restrictions that potential account holders must keep in mind:

  1. Lock-in Period: Post Office Monthly Income Scheme account holders must understand the lock-in policy associated with POMIS accounts. From the date of opening a POMIS account, an account holder cannot withdraw the amount deposited before 5 years. If the amount is withdrawn, penalty charges are levied.
  2. Maximum limits: The account holders can make a maximum investment of 4.5 lakhs, even if he/she holds the scheme in multiple post offices. The aggregate of those accounts, even in this case, cannot exceed 4.5 lakhs.
  3. Not for NRIs: This scheme is available only to resident Indians. NRIs cannot avail the scheme.
  4. Penalty: As mentioned, Post Office Monthly Income scheme come with a lock-in period. In case the account holder wishes to withdraw the investment corpus before the lapse of the lock-in period, a penalty is charged on the withdrawal amount, depending on the time of the redemption. If the holder withdraws the money before one year, there are zero benefits. If the account is closed between the 1st and 3rd year, the deposit is refunded with a 2% penalty, and if the scheme is closed between the 3rd and 5th year, it attracts a 1% penalty on the entire corpus.
  5. No tax Benefits: Post Office Monthly Income Scheme do not attract any tax benefits under Section 80C.

Comparing POMIS with other monthly income schemes:

post office monthly income scheme comparison with other scheme

Conclusion:

Post Office Monthly Income Scheme has emerged to be one of the most sought-after schemes in India, because of the low-risk factor. This attractive option of getting a fixed interest every month has attracted thousands of Senior Citizens in India.

Happy Investing!

Tags: basicsaving scheme
ShareTweetSend
Previous Post

9 Types of Volume Indicator a trader should know

Next Post

7 Intraday Trading Webinars every trader should attend

Elearnmarkets

Elearnmarkets

Elearnmarkets (ELM) is a complete financial market portal where the market experts have taken the onus to spread financial education. ELM constantly experiments with new education methodologies and technologies to make financial education effective, affordable and accessible to all. You can connect with us on Twitter @elearnmarkets.

Related Posts

5 Best Practices in Your First Year of Stock Market Trading 2
Basic Finance

5 Best Practices in Your First Year of Stock Market Trading

May 15, 2023
1.4k
Understand the MSCI Index and its Rebalancing Impact on the Indian Stock Market 3
Basic Finance

Understand the MSCI Index and its Rebalancing Impact on the Indian Stock Market

May 12, 2023
2.2k
Tax Planning - 7 Changes in the Indian Financial Environment that you need to know this Financial Year! 4
Basic Finance

Tax Planning – 7 Changes in the Indian Financial Environment that you need to know this Financial Year!

April 18, 2023
1.3k
Last-Minute Tax Planning- 5 Common Mistakes that Taxpayers Make 5
Basic Finance

Last-Minute Tax Planning- 5 Common Mistakes that Taxpayers Make

April 12, 2023
1k

Comments 2

  1. Samrat Mandal says:
    1 year ago

    U people doing great job

    Reply
    • Sakshi Agarwal says:
      1 year ago

      Hi,

      We really appreciated that you liked our blog! Thank you for your feedback!

      Keep Reading!

      Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Follow Us

Facebook-f Twitter Instagram Linkedin-in Youtube Telegram

Register on Elearnmarkets

Continue your financial learning by creating your own account on Elearnmarkets.com

Register Free Account

Download App

Categories

  • Basic Finance
  • Derivatives
  • Financial Planning
  • Fundamental Analysis
  • Technical Analysis
  • Marketshala
  • Miscellaneous

Popular On Elearnmarkets

  • Market Superheroes:
  • Vivek Bajaj
  • Chetan Panchamia
  • Ashish Kyal
  • Premal Parekh
  • Abhijit Paul
  • Jegan
  • Sivakumar Jayachadran
  • Vishal Malkan
  • Jyoti Budhia
  • Vivek Gadodia
  • Vishal Mehta
  • Piyush Chaudhry
  • Santosh Pasi
  • Gomathi Shankar
  • Market Superheroes:
  • Vivek Bajaj
  • Chetan Panchamia
  • Ashish Kyal
  • Premal Parekh
  • Abhijit Paul
  • Jegan
  • Sivakumar Jayachadran
  • Vishal Malkan
  • Jyoti Budhia
  • Vivek Gadodia
  • Vishal Mehta
  • Piyush Chaudhry
  • Santosh Pasi
  • Gomathi Shankar
  • Courses:​
  • Options Trading
  • Dow Theory
  • Momentum Trading
  • Stock Investing
  • Stock Market for Beginners
  • Harmonic Chart Patterns
  • Algo Trading
  • Elliot Wave Theory
  • Advanced Excel
  • Cryptocurrency
  • NSE Certification Course
  • Courses:​
  • Options Trading
  • Dow Theory
  • Momentum Trading
  • Stock Investing
  • Stock Market for Beginners
  • Harmonic Chart Patterns
  • Algo Trading
  • Elliot Wave Theory
  • Advanced Excel
  • Cryptocurrency
  • NSE Certification Course
  • Webinars:
  • Bank Nifty Scalping
  • Intraday Trading Strategies
  • Options Trading Strategies
  • Options selling
  • Price Action
  • Relative Strength
  • Tax Planning
  • Options Buying
  • Growth Stocks
  • Portfolio Management
  • Relative Strength Index
  • Risk Management
  • Renko Charts
  • Crude Oil
  • Traders Psychology
  • Moving Average
  • Multibagger Stocks
  • Webinars:
  • Bank Nifty Scalping
  • Intraday Trading Strategies
  • Options Trading Strategies
  • Options selling
  • Price Action
  • Relative Strength
  • Tax Planning
  • Options Buying
  • Growth Stocks
  • Portfolio Management
  • Relative Strength Index
  • Risk Management
  • Renko Charts
  • Crude Oil
  • Traders Psychology
  • Moving Average
  • Multibagger Stocks
  • Free Learning Modules:
  • Intraday Trading
  • Options Scalping
  • Swing Trading
  • Financial Modelling
  • RSI Indicator
  • Bollinger Bands
  • Pricing of Futures
  • Personal Finance
  • Initial Public Offerings (IPO)
  • Value Investing
  • Technical Indicators
  • Candlesticks
  • Chart Patterns
  • Option Greeks
  • ELSS Funds
  • Banking and Insurance
  • Real Estate
  • Gold
  • Free Learning Modules:
  • Intraday Trading
  • Options Scalping
  • Swing Trading
  • Financial Modelling
  • RSI Indicator
  • Bollinger Bands
  • Pricing of Futures
  • Personal Finance
  • Initial Public Offerings (IPO)
  • Value Investing
  • Technical Indicators
  • Candlesticks
  • Chart Patterns
  • Option Greeks
  • ELSS Funds
  • Banking and Insurance
  • Real Estate
  • Gold
  • Book Summaries:
  • Rich Dad Poor Dad
  • Psychology of Money
  • The Intelligent Investor
  • The Richest Man in Babylon
  • Think and Trade Like a Champion
  • Value Investing and Behavioural Finance
  • Trading in the Zone
  • Learn to Earn
  • Book Summaries:
  • Rich Dad Poor Dad
  • Psychology of Money
  • The Intelligent Investor
  • The Richest Man in Babylon
  • Think and Trade Like a Champion
  • Value Investing and Behavioural Finance
  • Trading in the Zone
  • Learn to Earn
  • Tools:
  • CAGR Calculator
  • SIP Calculator
  • eLearnOptions
  • Future Value Calculator
  • Present Value Calculator
  • Atal Pension Yojana
  • Cost of Delay Calculator
  • Become a Crorepati
  • Tools:
  • CAGR Calculator
  • SIP Calculator
  • eLearnOptions
  • Future Value Calculator
  • Present Value Calculator
  • Atal Pension Yojana
  • Cost of Delay Calculator
  • Become a Crorepati

© 2023 Elearnmarkets. All Rights Reserved

  • Visit Elearnmarkets
  • Courses
  • Webinars
  • Financial Guides
  • Get Free Counselling
  • Visit Elearnmarkets
  • Courses
  • Webinars
  • Financial Guides
  • Get Free Counselling

Get Elearnmarkets App

No Result
View All Result
  • Article Categories
    • Basic Finance
    • Derivatives
    • Financial Planning
    • Fundamental Analysis
    • Technical Analysis
    • Marketshala
    • Miscellaneous
  • Language
    • Hindi
    • Bengali
    • English
  • Courses
  • Webinars

© 2020 Elearnmarkets All Rights Reserved