The Post Office Monthly Income Scheme (POMIS) interest rate for the October to December 2026 quarter remains unchanged at 7.4%. This scheme allows investors to convert a lump sum into a fixed monthly income for five years, making it a popular choice for retirees and those seeking regular income.
- POMIS interest rate is 7.4% per annum, paid monthly.
- Maximum deposit for a single account is ₹9 lakh; joint accounts can hold up to ₹15 lakh.
- Monthly payout on ₹9 lakh deposit is ₹5,550.
- Interest earned is taxable according to the investor's income tax slab.
- Premature closure is not allowed in the first year; penalties apply if closed early after one year.
- Senior Citizens Savings Scheme (SCSS) offers a higher rate of 8.2% but requires the account holder to be at least 60 years old.
What is the Post Office Monthly Income Scheme (POMIS)?
POMIS is a government-backed savings scheme that provides a fixed monthly income for five years. Investors deposit a lump sum amount ranging from ₹1,000 to ₹9 lakh in a single account or up to ₹15 lakh in a joint account. The scheme pays interest monthly, which helps in generating a steady income stream similar to a pension.
How is the interest rate for POMIS determined?
The interest rate for POMIS is linked to the 5-year government securities (G-sec) rate with a 25 basis points spread, as per the Shyamala Gopinath Committee framework. For the July to September 2026 quarter, the 5-year G-sec averaged around 6.5%, which implies a formula-based rate of approximately 6.75%. However, the actual rate paid remains at 7.4%, which has been steady since April 2023.
What are the monthly payouts and tax implications?
On the maximum deposit of ₹9 lakh, POMIS pays a fixed monthly income of ₹5,550. The interest is credited every month but is taxable according to the individual's income tax slab. This means investors should consider their tax bracket when calculating net returns from the scheme.
Are there any restrictions or penalties for premature closure?
Premature closure of a POMIS account is not permitted within the first year. After one year, account holders can close the account early but will face penalties: a 2% deduction on the principal if closed between one and three years, and a 1% deduction if closed after three years but before maturity.
How does POMIS compare to other income options for senior citizens?
Senior citizens looking for monthly income options might also consider the Senior Citizens Savings Scheme (SCSS), which currently offers an interest rate of 8.2%. On a ₹9 lakh deposit, SCSS pays ₹6,150 monthly, which is higher than POMIS's ₹5,550. However, SCSS requires the account holder to be at least 60 years old, whereas POMIS has no age restrictions. With bank fixed deposit rates generally lower following recent Reserve Bank of India rate cuts, POMIS remains one of the better guaranteed income options available.
