The Post Office Monthly Income Scheme (POMIS) is a beneficial scheme that offers fixed returns on the invested amount. Under this scheme, the eligible candidates invest a certain amount in the post office and start earning fixed interest every month. As it is a government-backed scheme, so it is safe and involves low risk.
After investing the money in the post office under the POMIS scheme, the investor can easily collect the interest directly from the post office every month. They can also get it automatically transferred to their savings account. The investor also gets an option to reinvest the monthly interest amount in a SIP. The investor also gets the reinvestment feature under this POMIS scheme where they can reinvest the corpus post maturity for another 5 years. This is done in order to continue earning benefits from the same scheme, so if you want to take the advantage of this feature, then you can also go for it.
What are the Features & Benefits of the Post Office Monthly Income Scheme?
Here is the list of beneficial features of the Post Office Monthly Income Scheme, let’s have a look:
- One of the best things about POMIS is that the scheme is backed by the government, so the investor’s money will be safe till its maturity.
- The Post Office Monthly Income Scheme comes with the low-risk investment factor as your invested amount is not subject to market risks, so your money is quite safe.
- The investors will get a payout after one month of making their first investment.
- The investors can withdraw the amount that they have invested under this scheme when it hits the maturity period which is of 5 years. After completing the tenure or lock-in period of five years, you can also reinvest the amount.
- It is a very convenient scheme because of its affordability as the minimum initial investment starts at Rs.1,000. So, you can invest the amount according to your affordability.
- It is guaranteed that you will receive returns on your invested amount. You will get a certain amount of income on your invested money every month in the form of interest.
- As your invested money is not covered under Section 80C, therefore Tax Deducted at Source (TDS) is not applicable here.
- The investor also gets the feature to move their funds to a recurring deposit (RD) account under this scheme. This feature had been recently added by the Post Office.
- The Post Office Monthly Income Scheme comes with multiple account ownership. This means you can have more than one account in your name, however, the total amount that you will deposit cannot surpass Rs.4.5 lakh in all of them together.
- Other than owning more than one account in your name, you can also open a joint account including 2 or 3 people. Meanwhile, the aggregate amount, in this case, should be up to Rs.9 lakh for the investment.
- The investor can also nominate a beneficiary, in case of any unexpected event in which the investor passes away during the ongoing term of the account. By adding a beneficiary to the account, the recipient will be entitled to claim the benefits, if something happens to the investor during the account’s term.
What are the Eligibility Criteria to open a POMIS Account?
In order to open a POMIS Account, the interested investors need to qualify some rules and guidelines that are specifically set for them by the Post Office. To know what are the eligibility criteria to open a POMIS account, read the following information carefully.
- First and most important, the applicant must be a resident of India for opening a POMIS account.
- People living outside India or NRIs are not eligible to apply for this scheme.
- Any adult can open a POMIS account, and they can also open it on the behalf of a minor (aged 10 years and above). They can get access to all benefits of funds when they turn into 18 years of age.
- If an adult has opened an account for a minor, then after the child attains the legal age, he/she has to apply for the conversion of the account in his/her name.
How to open a POMIS Account?
If you are interested to open a POMIS Account, then you need to follow the step-by-step procedure that is given down below:
- Step 1: At first, you need to open a post office savings account in order to apply for a POMIS account. If you already have a savings account in the post office, then you can skip this step and move on to the next one.
- Step 2: Now, you need to collect a POMIS application form which you can get from your Post Office near your location.
- Step 3: Fill out the form completely and correctly. Once you have completed the form, attach a photocopy of your ID as well as residential proofs along with 2 passport-size photos. Now, submit the form along with all the required documents photocopy at the Post Office.
- Step 4: After this, you have to get the signatures of your witness or any listed nominee(s) on the form.
- Step 5: Now, you have to make the initial deposit, and it can be done through cash or cheque. If it is a post-dated cheque, then you must fill in the date on the cheque on which you have opened the account.
- Step 6: As soon as the processing is done, the executive at Post Office is going to offer you all the important information regarding your newly opened account.
One should take note that the maximum deposit amount allowed for a Single Account is Rs.4.5 lakh, while for the Joint Account (2 or 3 adults) it will be Rs.9 lakh. However, if you withdraw the money before completing one year, then you will not be entitled to any benefit of the scheme. If the investor withdraws the money between the 1st and 3rd year, then the complete deposit is refunded after withholding a 2 percent penalty. On the other hand, if the invested money is withdrawn between the 3rd and 5th year, then your entire corpus will be refunded with a 1 percent penalty.