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Post Office Monthly Income Scheme (PO MIS)

InvestmentYogi : Detailed information on Post Office Monthly Income Scheme 2011.

What you need to know about Post Office MIS? InvestmentYogi tells you all about it.

Post Office Monthly Income Scheme 2010, Postal Monthly Income Scheme India, Post Office Income TaxThis scheme appeals to conservative investors with traditional values, and for good reason. This scheme offers monthly income and is a safe, guaranteed-by-the-government option. For retirees, widows and others looking for a steady income, it can be ideal. Read on to learn more.

                                                         

The Post Office Monthly Income Scheme, or PO MIS, is offered by Indian Post Offices. A lump sum amount is deposited with the post office and monthly interest earned each month is paid out to you.

                                                                      

As the scheme is offered by post offices, it is backed by the government. Thus, the PO MIS is one of the safest investments available.

                                          

Interest

The rate of interest offered on PO MIS is 8% per annum (year). Interest is paid out every month but direct credit to your bank account remains a problem as Post Offices are not that technologically advanced in India, as such one needs to go and collect the monthly income from the PO directly. However if you have a savings account in the same post office then interest can be credited directly to your account. A 5% bonus is paid on maturity of the fund, therefore, the effective yield works out to 8.9% per year.

                        

The interest earned is fully taxable. There is no tax deducted at source (TDS). The investment in PO MIS is exempt from wealth tax.

                                      

Who is eligible to invest?

Only individuals can invest in PO MIS. You can either open a single or joint account. A Non Resident Indian (NRI) or Hindu Undivided Family (HUF) cannot open a PO MIS account.

                                

Investment Limit

There is an upper limit on investment in a PO MIS scheme. You cannot invest more than Rs 4.5 Lakhs in a single account. If you invest jointly (2/3 names), the limit is Rs 9 Lakhs. The minimum investment is Rs 1,500.

                             

Duration

The tenure of PO MIS is 6 years – your investment is locked in for this time period.

                                    

Number of Accounts

Any number of accounts can be opened, but the total investment cannot exceed the upper limit across all the accounts.

                                 

Nomination

You can specify the nominee at the time of opening the account, or at any time later.

                 

Premature withdrawal, encashment, closure & Penalty

Premature withdrawal of the invested amount is allowed after 1 year of opening the account. If the account is closed between 1 and 3 years of opening, 2% of the deposited amount is deducted as penalty. If it is closed after 3 years of opening, 1% of the deposited amount is charged as penalty. The bonus amount is forfeited when you close the account early.

                                         

The author Ariadne Horstman is a Financial Planner at InvestmentYogi.

                

Do you want to know if you are saving enough? Take a FREE Financial Health Check by clicking here. 

Do you want to double your money? Use this calculator to find out how long will it take. For more calculators click here.

                             

                                                                  

RELATED STORIES:

Monthly Income Plan Funds

Best Tax Saving Mutual Funds

National Savings Certificates (NSC)

Financial Planning

                   

InvestmentYogi : India's Leading Financial Service Providers offers detailed information on Post Office Monthly Income Scheme 2011.

Published Jan 07 2010




Comments

Comments

 

Amit said:

I didn't get advantage of POMIS over PPF as I see its interest is taxable while PPF interest is tax free. Is it just the lockin period of 6 vs 15 years for PPF?

January 13, 2010 4:38 AM
 

kirran said:

i think investment in POS is waste bcoz interested earned from our investment is fully taxable & if we withdraw our fund before the maturity period v vl loose 2% deduction amount +  bonus amount is fully forfeited best is to invest in ppf which is long period but v vl get 60% of investment as loan from PPF department & interest earned from ppf is exemption U/s 10(11) is fully exempted

January 15, 2010 8:08 PM
 

mahesh said:

i think investment in POS is waste bcoz interested earned from our investment is fully taxable & if we withdraw our fund before the maturity period v vl loose 2% deduction amount +  bonus amount is fully forfeited best is to invest in ppf which is long period but v vl get 60% of investment as loan from PPF department & interest earned from ppf is exemption U/s 10(11) is fully exempted

January 30, 2010 3:05 AM
 

col sk sharma said:

investing in mis is a waste and blocking of your money. In a bank like icici if you invest 6,00,000 for one year you get intrest of 6.75 % which on comulative effect works out to be approximately 7%. Benifits are:-

1) LIQUIDITY

2) NO BLOCKING FOR SIX YEARS

February 7, 2010 9:32 AM
 

pammi said:

I invested RS. 5 lakh in monthly income scheme with my husband,but unfortunately my husband died after 3 months.am i required to take out Rs. 50,000 ?If yes ,how to go about it.

February 19, 2010 10:50 AM
 

Vineesh said:

Pammi, you can not withdraw the amount till one year.

March 11, 2010 5:41 AM
 

nabanita said:

What r the tax savings schemes of post office?

March 25, 2010 7:20 AM
 

Mr jethra said:

we putted just few days before, i and my facing unforeseen circumstances will it possible to withdrawal. any authority i can approach

March 31, 2010 11:19 PM
 

sanand said:

can you tell that if interest earned from mis 6000 is it taxable

April 13, 2010 2:44 AM
 

vimala said:

Very useful article.Is tax eating away your hard

earned money? Want to know more about bonds,post office schemes

and other money related mattersclick the below link

<a>http://moneyrumors.blogspot.com</a>

April 18, 2010 10:30 PM

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