Post Office MIS Calculator

How the Post Office Monthly Income Scheme works

POMIS is a government-backed savings scheme run through India Post. You deposit a lump sum once, the post office pays you a fixed monthly interest for five years, and you get the full principal back when the account matures. No market exposure, no variable returns. The rate is set by the government each quarter and locked in on the day you open the account.

It works well for anyone who needs a dependable monthly cash flow: a retired parent whose pension falls short, or someone who has received a lump sum from a property sale or gratuity payout and wants to put it to work without market exposure. Every rupee deposited generates a fixed monthly interest at whatever rate applies on the opening date.

Deposit limits: single and joint accounts

A single account can hold up to ₹9 lakh. A joint account (opened with up to two other people) can hold up to ₹15 lakh. These ceilings apply across all your POMIS accounts in aggregate, so you cannot open two single accounts and deposit ₹9 lakh in each. The minimum opening amount is ₹1,000, in multiples of ₹1,000.

In a joint account, ownership is split equally between holders. If two people deposit ₹15 lakh jointly, each person's share counts as ₹7.5 lakh toward their individual single-account ceiling. This matters if either person also wants a separate single POMIS account: they can add at most ₹1.5 lakh more.

5-year tenure and maturity

The tenure is fixed at five years (60 months). There is no automatic rollover. At maturity, the post office returns the principal; if you want to continue, you open a fresh account at whatever rate applies then.

The first interest payment arrives one month after the date of deposit, not at the start of each calendar month. Open the account on 15 June and the first credit lands around 15 July.

Premature withdrawal penalties

POMIS allows exit before maturity, but not without cost:

• You cannot withdraw at all in the first year.
• Close between year 1 and year 3: you lose 2% of the principal.
• Close between year 3 and year 5: you lose 1% of the principal.

On a ₹9 lakh deposit closed in year 2, that is ₹18,000 gone — about three months of interest. Not catastrophic, but enough to sting. This is not a scheme for money you might need in a hurry. Keep your emergency fund in a liquid account, separate from this.

Tax treatment

The monthly interest is taxable as "income from other sources" at your slab rate. The post office does not deduct TDS; the full amount hits your savings account each month. You must declare it in your ITR each year. POMIS does not qualify for a Section 80C deduction. If the interest pushes your income into a higher slab, work out the after-tax yield before comparing it against a bank FD or other instruments.

Worked examples at the current 7.4% rate

A couple depositing the maximum ₹15 lakh jointly gets ₹9,250 per month. That covers basic living costs in most tier-2 cities. Over 5 years, total interest received is ₹5.55 lakh and the full ₹15 lakh principal comes back at maturity. Compare this against a bank FD after adjusting for slab-rate tax on both.

For a single depositor at ₹9 lakh, the ₹5,550 monthly income works out to a pre-tax yield of 37% over five years. There is no compounding here: the interest is paid out each month rather than reinvested. If you put each monthly payout into a liquid fund or RD, the effective yield rises above 37%.

Frequently asked questions

Related reading

See how POMIS compares with SCSS, Kisan Vikas Patra, and NSC in our Post Office Monthly Income Scheme 2026 guide. For a side-by-side view of all government savings instruments by return and lock-in period, see best government savings schemes in India 2026.