Post Office Monthly Income Scheme: Features and Benefits

When we talk about investment options with guaranteed returns the people generally think of Bank FD. However, there is another option for the investors where they can make a deposit in the Post office monthly income scheme (MIS). As the name of the scheme indicates, the investor gets monthly interest on the amount deposited in MIS. This is quite useful in situation like where you want to provide a certain sum of money to the family members for monthly expenses. Since the return is guaranteed (8%), there is not complexity involved as in case of mutual funds or share market. In this post, we will discuss the features and benefits of post office monthly income scheme.

Features of Post Office Monthly Scheme

1. The maximum amount that can be deposited in MIS account is Rs 4.5 lakh in case of single account and Rs9 lakh in joint account. The interest rate is 8.50% and the tenure of the policy is 6 years.


2. A demerit of the scheme is that you cannot claim tax rebate for the investment made in this section as per section Sec 80 C. The interest is also taxable though TDS is not deducted.


3. One can even discontinue the investment after a year. However, there is a penalty of 2% if the MIS is discontinued within 2-3 years. If it is discontinued after 3 years, there is a penalty of 1%.


4. An important thing to remember here is that if you forget to get the interest for a particular month, you will not be paid any interest on that amount. It will simply lie in the MIS account.


5. There is an option to transfer the MIS account from one post office to another free of cost.


6. There is an option to add nominee as well. If you forget to use this option while opening MIS account, you can get it done later.

How to Get Maximum Returns from the MIS Scheme