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 The interest income from post office MIS used to be tax free under section 80L, but that section has been withdrawn from April 1 2005.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.
Iam getting the MIS int regularly in uninted bank of India,may I get the matured amount with bonus in the same bank directly on request
i am a retired person &having a m.i.s since 2010 in a post-office(kolkata writers building)&getting mis interest regularly in my bank account through ecs but suddenly post office has stopped such transfer of interest to my bank account without any intimation to me.
After quary to the post office they informed that govt has withdrawn such ecs facility &i have to open a saving account in this branch to get the monly interest.
plese inform me what i will do now since i deposit the fund in post office mis since they are having an ecs facility during opening my mis account &now i have no other alternative to premature closure of my mis saving with penalty&without bonus.
it is evident from central govt above action that they are not in a favour of small scale saving in practice.
1. Can the joint MIS account( with three names) be transferred to other post office, if second named a/c holder( having the Pss Book with him) apply for the transfer or Whether the signatures of all 3 a/c holders are must ?
2. Can the monthly interest withdrawal from joint MIS account be stopped or the account be freezed as per the prayer of one of the joint a/c holder for not receiving the share of his monthly interest ?
Sorry, you need to contact the post office in your area for your queries.
I am a joint holder of mis with my mother. Can she alone withdraw the mis on maturity or my presence is requried
You would be required to sign the withdrawal form. You physical presence is not required.
what is the taxability of Bonus received in post MIS scheme.
it is taxable under the head income from other source.
sir,
my grandfather opened a mis account in the year 2010.
So on maturity the amount is eligible for bonus of 5%? As since 2012 no bonus will be provided under this scheme.As my grandpa had opened an account in 2010 so i want tob know whether he will get bonus of 5% as no bonus provision came in 2012.pls rply its urgent.
Hi Ravi,
Your grandfather will get the 5% bonus.
Dear Sir,
I have 2 uncle both are unmarried but my one uncle was no more and he had invest amount 4,00,000/- in mis in post
they have joint account in this with his friend ,now his friend want to withdraw amount and want to cheat with us
so
>> I kindly request you to give suggestion how we stop him ??
>>Is their any rule in post to block amount if one of joint holder was died ??
>> is required Genealogy ??
Hi Amit,
In this case, the nominee or your uncle’s legal heir should visit the post office and claim your uncle’s money. You can ask for the precise procedure at the post office.
Dear Sir, I have just opened one PPF A/c March 13 onwards in my name. I am Investing 8000/-pm Please suggest for my future retirement. After completion can I Invest all the maturity amount through Post office MIS. How much I can get per month.
Dear Sir,
my father opened a mis joint account with my mother at post office.
but my father expired on 09th july 2014, therefore i want to nominee
in that accounts so what is the procedure.
thanking u
subhasis
sir,
My father having a MIS of Rs. 3 lakhs, for which I am nominee.
above MIS will mature on June 2016.
But my father expired on 25 the September 2014.
please suggest me what to do.
The account stops after death. You can claim the amount of Rs.300000.00 in the prescribed form alongwith death certificate.
Form is available at: http://www.indiapost.gov.in/pdfForms/ClaimApplnforNomnhasbeenRegdwithPO.pdf.
Change Savings to MIS in the heading.
Dear sir
If I deposit rs.10000 in this scheme so how much amount of interest should I get per month.
Deposit should be in multiple of Rs.1500.00. Therefore for Rs.10500.00, monthly payout would be Rs.74.00.
Dear Sir,
I would like to know whether both Joint Holders of MIS Account (Total Rs. 900000) should have the same address or they can have different address.
Thanks & Regards,
Radhey MOhan
I have my Mis with full limit have 2 daughters one of 15 & other of 5year can I deposit 4.5 lakhs separate by opening their mis.pls tell for both
Account can be opened in the name of a minor. Minor of 10 years and above age can open and operate the account. So yes for the elder daughter,but no for the younger one.
Pl refer to http://www.indiapost.gov.in/POSB.aspx
I have to deposit a Cheque of MIS after maturity into my accoutn but it was lost and time period of three months validity of cheques also passed now what should i do to re issue my cheque from post office so that i can now deposit it within time .. please send me reply in my email
You should approach the post office and request them to reissue the maturity cheque to you.
hey i have this mis scheme.and i have this account from 2011..so it is illegible for the bonus.i want to know if i withdraw some amount from this account i m still illegible for the bonus at the six year maturity date??or bonus is cancelled out because of the withdrawal off that amount????
Premature withdrawal is not permitted in Post Office MIS account. However, you can get it closed prematurely. There are penalty provisions in case of premature closure, so you should not expect any bonus in case you decide to close it before maturity.
Dear Sir,
I am looking for compound interest plan, is there any plan as such in which I can earn near to 1 Cr Rs at the end of my 55 I am 24 now.
Thanks.
Try recurrent deposit of Rs.5000.00 per month at 9% interest for 31 years. Would give you Rs.100,74,937.18 .
May I know which bank is offering this?
Suggestion:
1)You can open a PPF account and deposit Rs.5500.00 per month.
2)Interest would be tax free.
3)80c benefit in IT.
4)After 15 yrs,extend in batches of 5 yrs.
5)Rate of interest may vary year to year.
Year Rate Interest Scheduled Deposits Balance
1 8.70% 2,696.40 66,000.00 68,696.40
2 8.70% 8,917.16 66,000.00 1,43,613.56
3 8.70% 15,701.23 66,000.00 2,25,314.79
4 8.70% 23,099.63 66,000.00 3,14,414.42
5 8.70% 31,167.99 66,000.00 4,11,582.42
6 8.70% 39,966.98 66,000.00 5,17,549.39
7 8.70% 49,562.75 66,000.00 6,33,112.14
8 8.70% 60,027.46 66,000.00 7,59,139.60
9 8.70% 71,439.79 66,000.00 8,96,579.39
10 8.70% 83,885.56 66,000.00 10,46,464.95
11 8.70% 97,458.35 66,000.00 12,09,923.29
12 8.70% 1,12,260.21 66,000.00 13,88,183.51
13 8.70% 1,28,402.45 66,000.00 15,82,585.96
14 8.70% 1,46,006.44 66,000.00 17,94,592.39
15 8.70% 1,65,204.54 66,000.00 20,25,796.93
16 8.70% 1,86,141.12 66,000.00 22,77,938.05
17 8.70% 2,08,973.59 66,000.00 25,52,911.64
18 8.70% 2,33,873.64 66,000.00 28,52,785.28
19 8.70% 2,61,028.51 66,000.00 31,79,813.79
20 8.70% 2,90,642.36 66,000.00 35,36,456.15
21 8.70% 3,22,937.87 66,000.00 39,25,394.02
22 8.70% 3,58,157.89 66,000.00 43,49,551.91
23 8.70% 3,96,567.23 66,000.00 48,12,119.13
24 8.70% 4,38,454.70 66,000.00 53,16,573.83
25 8.70% 4,84,135.27 66,000.00 58,66,709.10
26 8.70% 5,33,952.40 66,000.00 64,66,661.50
27 8.70% 5,88,280.70 66,000.00 71,20,942.21
28 8.70% 6,47,528.66 66,000.00 78,34,470.87
29 8.70% 7,12,141.78 66,000.00 86,12,612.65
30 8.70% 7,82,605.90 66,000.00 94,61,218.56
31 8.70% 8,59,450.86 66,000.00 103,86,669.42
Sir I deposited Rs. 4.5 lakhs(sole holder) in post office MIS scheme in Nov.2010. one year later I deposited another 4.5 lakhs (with my son as joint holder. Both were done through the same agent. Now the post office(Vasco) says the entire 9 lakhs had to be joint holding. They say they will recover the interest paid to me in the second account(joint holding i.e interest on 2.25 lakhs). Kindly advise. Thank you
Hi Mrs. Leela,
With Post Office MIS, you can deposit a maximum of Rs. 4.5 lakh in a single name and Rs. 9 lakh in joint names. In your case, it is more than Rs. 4.5 lakh in a single name, so the post office is right in recovering the extra interest paid to you.
I invested on 19-6-2008, a sum of Rs.3 lakhs in Indian post office MIS scheme and the monthly interest is automatically credited into RD. How much I will get at the end including bonus etc. I did not take any loan/ withdrawal in the middle and continued the whole tenure of 6 years as well as in MIS and RD
You need to contact the post office guys to get the details of maturity proceeds.
i just wanted to clarify one thing if i will deposit 1000000 laks for 5 year so i will get 8.5% interest per month after 5 year once my maturity will finish how much bonus should i receive
Hi Vivek,
Bonus has been discontinued by the government in Post Office MIS w.e.f. 1st December, 2011. So, you’ll not get any bonus now.
sir
what to do in case of MIS post matured.i mean how to calculate interest in that case?
In case of MIS interest is paid monthly, so at the end i.e on Maturity you will be getting your principal invested amount back with bonus if applicable at that time, becuase since the last 1-2 years bonus have been cancelled.