Post Office Monthly Income Scheme: Features, benefits; All you need to know

The Post Office Monthly Income Scheme (MIS) is one of the small savings investment schemes run by the Ministry of Communications. Investment in this scheme can be started with a minimal amount, which makes this scheme one of the popular investment options in India.

The Post Office Monthly Income Scheme (POMIS) is a low-risk investment scheme that offers steady income and is especially suited for conservative investors and senior citizens. The investment period for this scheme is set at 5 years. Individually, one can invest in this scheme up to Rs 4.5 lakh and Rs 9 lakh jointly. Post Office MIS is offering an interest rate of 7.6 per cent per annum from 1st July 2019, which is payable annually.

Here are the top 10 features and benefits of the Post Office MIS scheme, you should know about;

1. The investment amount of an investor until maturity is protected by the government as this is a government-backed scheme. Also, the scheme is a low-risk investment. POMIS being a fixed income scheme, the money deposited by investors are not subject to market risk and stays safe.

2. Post Office MIS comes with a lock-in tenure of 5 years. When the investment matures, the amount can be withdrawn or re-invested.

3. Investors can start by depositing an amount as low as Rs 1,000 in the MIS scheme. Investors can also gradually multiply this amount over time.

4. Investments in Post Office MIS does not fall under section 80C. The income is subjected to taxation, but it has no TDS.

5. The investor will receive the payout from its investment starting from the first month of making the investment. Note that, the payouts come at the end of every month, not the beginning.

6. The returns from the investment in POMIS does not beat inflation, even though they offer higher interest as compared to other fixed-income investments including bank FDs. The investor will earn guaranteed returns in the form of interest every month.

7. More than one account can be opened by an investor in their name. Even though one can have multiple account ownership, the total deposit amount cannot exceed Rs 4.5 lakhs together in all of the accounts.

8. A joint account can be opened by an investor with up to 3 people. Keep in mind, irrespective of who is making the contribution, the account belongs to all account holders equally.

9. On behalf of a minor aged 10 or above, an investor can open an account in their name. The minor will be able to access the funds after reaching 18 years of age. In case of a minor, the total investment cannot exceed a total investment amount of Rs 3 lakh.

10. Investors will also be able to nominate a beneficiary or a family member in their account, who will be able to claim the benefits and corpus in the future.

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