Post Office Monthly Income Scheme

by Manshu on December 13, 2010

in Investments

Post Office Letter Boxes, EC1A 1AA .London Chief Office 1994photo © 2008 Felix O | more info (via: Wylio)

Couple of weeks ago, I wrote about Monthly Income Plans or MIPs, and this week I’m going to write about a similar monthly income scheme from the Indian post office called the Post Office Monthly Income scheme.

This is a fixed income scheme which provides you a guaranteed return on your investment, and is meant for people who are looking for a monthly source of income without taking any risk at all.

Where the mutual fund MIP invests a part of its assets in equity, and even gold in some cases – and may sometimes even get you a higher than 10% return (with commensurate risk of course) this scheme has a fixed rate of return and is meant for people looking for an ultra safe investment.

Here are some features of this scheme.

Post Office MIS Interest Rate

This is a scheme from the Indian postal service that earns you an interest of 8% per annum, and generates a monthly income for you.

So if you invest Rs. 100,000 in it – your annual interest at 8% will be Rs. 8,000, and you will get Rs. 666.67 monthly.

Post Office MIS Tenure

The maturity period of the scheme is 6 years, at the end of which you will get your money back. You cannot redeem your money within a year, but you can redeem it after that upon paying a penalty.

Here is how that works.

Less than 1 year: MIS can’t be encashed.

1 – 3 years: You are penalized 2% of deposit.

After 3 years: You are penalized 1% of your deposit.

5% Bonus

If you retain your Post Office MIS till maturity (6 years) – at the end of the time period you will be given a 5% bonus on your deposit.

Minimum and Maximum Investment

The minimum sum you can invest is Rs. 1,500, and you can go up to Rs. 450,000 in case of a single account, and Rs. 900,000 in case of a joint account.

Tax on Post Office MIS

There is no TDS on the Post Office MIS, but the interest income is taxable in your hands. The interest income from post office MIS used to be tax free under section 80L, but that section has been withdrawn from April 1 2005.

Interest can be automatically credited to your bank

At the time of opening the scheme you can give in your bank account details, and interest will be automatically credited to your bank every month.

Transfer from one post office to another

There is a provision that allows you to transfer your money from one post office to another. So, if you opened your account in one post office, and moved to another place you can fill up a transfer form with them, and move your scheme to another post office.

Conclusion

This scheme is meant for people who are looking for an ultra safe investment and a regular source of monthly income on top of it. A lot of retired people will fall under this category, and if you fall under that category then you need to evaluate other options like the Senior Citizens Savings Scheme before you invest in this scheme. I”ll cover that scheme in the days to come, and if you have any questions about this particular scheme or any other observations please leave a comment.

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{ 216 comments… read them below or add one }

Devashree March 14, 2015 at 11:29 pm

Hello Sir,
I have invested Rs.9,00,000 in MIS in a post office . It’s a Joint Account and it is written as Joint ‘B’ there on the Passbook . What does this Joint ‘B’ mean ? Kindly give me the explaination.

Reply

SUNIL KUMAR July 2, 2015 at 2:14 am

dear sir
I have a MIS A/C of 600000 in bistupur office in jamshedpur in joint B.I am account holder with my two yelder brother but i have not a pass book of the account and they not give me a any type of money .Plz sugess me what i can do or process to stop the payment? for this i will be thanking for you .

Reply

KUL BHUSHAN DHAWAN March 15, 2015 at 9:18 pm

Dear Sir,
Joint ‘B’ means any one of the joint holders can operate the account as well as withdraw the amount from the MIS Account.
— KB DHAWAN

Reply

RAKHI BHATTACHARYYA March 28, 2015 at 9:11 am

Dear Sir,
My Teacher open a MIS joint b type account in a post office at Uttarpara in Hooghly district ,West Bengal on Feb,2009, She is the 1st person & her elder sister is 2nd person. But after maturity on February 2015, She can’t withdraw the account because the Post office
demands ID and Address Proof of both account holder and my teacher is 73 years old and her elder sister is 78 years old and live in Bangalore and she is unable to send her documents due to age and illness…
So what my teacher can do..Please help me

Reply

Ayan Chatterjee May 3, 2015 at 12:19 pm

what is minimum age requered for openning mis account?

Reply

Ayan Chatterjee May 3, 2015 at 12:20 pm

what is minimum age required for openning mis account?

Reply

Sid Ghosh June 2, 2015 at 12:04 am

Hi all,

I need your help urgently. Actually my father did a MIS of Rs 75000 in our local post office. The MIS A/C has got three members –
First holder: me
Second holder: my elder sister
Third holder: my father

My father died on June 2013 and I have the death certificate of my dad. Also I have got my all KYC documents. Now the MIS has been matured but I can’t withdraw any money as my elder sister intentionally not proving any photocopy of her KYC documents.

Please suggest me what should I do in this situation.

Thanks,

– S Ghosh

Reply

Sid Ghosh June 2, 2015 at 12:08 am

Hi all,

I need your help urgently. Actually my father did a MIS of Rs 75000 in our local post office. The MIS A/C has got three members –
First holder: me
Second holder: my elder sister
Third holder: my father

My father died on June 2013 and I have the death certificate of my dad. Also I have got my all KYC documents. Now the MIS has been matured but I can’t withdraw any money as my elder sister intentionally not providing any photocopy of her KYC documents.

Please suggest me what should I do in this situation.

Thanks,

– S Ghosh

Reply

Andy June 20, 2015 at 1:57 am

Can you let me know the process of redeeming post office savings after maturity? Can the withdrawal be made from another branch?

Reply

Seema July 13, 2015 at 5:06 pm

Hi my father didn’t show the interest in his income tax for five years and now he is worried that after 5 years when he got all d money and if he will get any penalty from income tax?

Reply

B D'Costa July 18, 2015 at 5:40 pm

In shifting residence I have lost the pass books for the MIS of the postoffice scheme which i invested. Now i need to claim as the investments have matured. Please tell me what to do.

Reply

jitendra kumar July 28, 2015 at 2:28 pm

Ghh

Reply

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