Sunday, May 15, 2011

Post Office Monthly Income Scheme (POMIS)

Post Office Monthly Income Scheme (POMIS) FAQs

The Indian Post Office Saving schemes are the most popular schemes in India. There are several post office savings schemes in India out of which the Monthly Income Scheme (MIS) is the most popular scheme.

There are several tax benefits on the post office schemes and the schemes are also available for the senior citizens for special interest rates.

Key Features of POMIS -

It has the lock in period of 6 years. The interest rate of POMIS is 8% Compounded annually and payable monthly. The Maximum amount allowed for the investment in this scheme is Rs.4.50 Lakhs for single account and Rs.9 Lakhs for the joint account And the Minimum amount is Rs.1500 and multiple there of.

The Interest amount can be credited to PO saving bank account upon we giving auto credit letter to PO. Saving Account with cheque book facility you must maintain a minimum balance of 500 /-

The account can be opened in any departmental post office and is transferable from one post office to another. The interest amount is payable monthly. i.e for every 9,00,000 you invest (in joint account) you are eligible for 6,000 a month as interest.

If the account is closed on or before expiry - i.e between one and three years opening of such account, an amount equal to two percent of the deposit amount will be deducted as penalty and balance 98% of your investment will be paid to the depositor. If the said account is foreclosed on or after 3 years then the penalty is only one percent of your investment. No bonus is payable in case of foreclosure of your POMIS Account before its maturity date.

Here comes the best part. The best thing about Post Office Monthly Income Scheme (MIS) is that, if you continue the deposit for full 6 years, you will get 5% Maturity Bonus. Now, this is really amazing.

This is the only post office saving scheme where the monthly interest is payable. NRIs and HUF can not open this account.

The account can be opened by an Individual, 2/3 adults jointly and a minor through a guardian.

I am NRI so I can’t open MIS account.Can I put my name as a joint holder with my wife & then we can invest up to max. her limit of 4.5lakh?

If you are NRI than you can not open single or joint account. Of course, if your wife is living in India than she can anytime open the account. But you can not.

POMIS + Recurring Deposit – Best Combo -

You can Deposit in Monthly Income Scheme and then invest interest in Recurring Deposit to get a very attractive interest of 10.58% without TDS. Still it sounds better than FD return (currently bank is giving 8.5% … plus they deduct TDS in it).

Update: -

The effective yield would jump to 8.9% (from the previous 8.3%) due to the maturity bonus of 5%.

It should be noted that there was a bonus of 10% on Post Office Monthly Income Scheme (PO MIS) / Post Office Monthly Income Account (PO MIA) earlier, but it was withdrawn by the government some time back. (Before 2007).

In case of any doubt on the above please feel free to call me on 9840858585

Ramesh Bhat, CPFA., CFP

Certified Financial Planner

CEO., M/s. Aniram

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