Post Office Monthly Income Scheme Interest Rate

Post Office Monthly Income Scheme Interest Rate

Investment
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At present, we all want to invest without much risk. An option where we can deposit our hard-earned money safely. Not only that, the higher returns are always welcomed on the saving schemes. The Post office Monthly Income scheme is such a scheme that provides you higher safety and promises you a high return in the form of Post office Monthly Income scheme interest rate or MIS Interest Rate. 

Post office Monthly Income scheme interest rates are the interest benefits one can get on the amount deposited by him on a monthly basis. To know more let’s know what the Post office Monthly Income Scheme is and how Post office monthly income interest rates work. 

 Here in this article, we will explain the Post Office monthly income scheme interest rate. Before that, let’s check what a Monthly income scheme is and how you can benefit yourself with the help of this monthly income scheme in the post office. 

Table of Contents

PS Monthly Income Scheme and Interest Rate

Under the Monthly income scheme, you have to invest a definite amount of money and earn interest on it per month. The interest provided under this scheme is known as the Post office Monthly Income interest rate.

Post Office Monthly Income Scheme Interest Rate 2021

The India post offers the Monthly Income scheme in the post office to the desirable account holders who want to go for a monthly saving income scheme in India Post. The account opened under this scheme is a term deposit type with less risk. Under this, the account holder is entitled to earn Post office Monthly income scheme interest rate on the fixed amount deposited by him every month. 

If you want to earn extra money which can help you financially then the Monthly Income scheme in the Post office is the best option for you. This extra money is earned by the Post office monthly income scheme interest rate provided by India Post. The Monthly income scheme in post offices is a service provided by DoP (Department of Posts) which is a government organization under the government of India. 

If you want to open a deposit account under the Monthly income scheme in the Post office then you can visit any India Post Office and open your account under the scheme. 

In May 2021, the Post office monthly Income scheme interest rate was 6%. 

Post Office Monthly Income Scheme: Eligibility

The people eligible for the monthly income scheme in post office are given below-  

  • If you are an Indian citizen then you can avail of this Monthly income scheme in the post office.
  • Non Residential Indians are not allowed to open an account under this monthly income scheme in the Post Office. 
  • Any individual who is 10 years or above 10 years old can avail of this scheme

Who should invest in the Post Office Monthly Income Scheme

  • If you want to open an account under the monthly income scheme and reap some additional benefits without any risk then the monthly income scheme in Post Office is the right option for you. This monthly income scheme in Post Office is more suitable for the retired pension holders.
  • If you are looking for a one-time final investment that can help you in getting the additional monetary benefits each month. 
  • A monthly income scheme in post office is beneficial for those investors who are looking for a long-term investment. With an attractive Post office monthly income scheme interest rate, this scheme can give you additional monetary benefits.

How much one can invest under a Monthly income scheme in Post Office

There is an upper limit for the account holders of the Monthly income scheme although an individual can have many accounts under Post Office Monthly Income Scheme. The maximum amount that can be saved under the monthly income scheme in post office is definite. 

  • If you open a single account under this monthly income saving scheme, then the maximum amount limit you can deposit is INR 4.5 lakh. 
  • If you have a joint account with other partners then the maximum amount you can deposit is INR 9 Lakh under the Post office monthly income scheme. 

Monthly Income Scheme in Post Office: Interest Rate

The post office Monthly Income scheme interest rate is not provided to senior citizens as they need to invest through the Senior citizens saving scheme.  The mentioned Post office Monthly income interest rate for the monthly income scheme in the post office is given as of May 2021.

Time period Interest rate (per annum) (May 2021)
5 years 6.6%

The Post Office Monthly Income Scheme Interest Rate in previous years

The Post office Monthly Income interest rate is decided by the finance ministry under the Indian government quarterly. It usually depends on the returns received by the government. For the month of April to the month of September 2020, the Post office monthly income scheme interest rate was 6.60 per annum. For May 2021, the post office monthly income scheme interest rate was 6.6% per annum. 

Time period Interest Rate
per annum
1 April – 30 September 2020 6.60%
1 April – 30 June 2018 7.3%
1 January – 31 March 2018 7.3%
1 October– 31 December 2017 7.5%
1 July  – 30 September 2017 7.5%
1 April– 30 June 2017 7.6%

Points to note under Post Office Monthly Income Scheme

The important points of Monthly Income scheme in Post Office are mentioned below-

  • Maturity period- The maturity period under the Monthly saving scheme is 5 years in total. 
  • Account- Under The post office monthly income scheme, an individual can have a single account or can choose to have an account jointly. 
  • Amount  
  1. The minimum amount that you can deposit under Monthly income scheme in post office is INR 1500.
  2. The maximum amount you can deposit under post office monthly income scheme is the type of account you are opening. Here is a general idea of the maximum amount under different accounts-
Account Type Maximum Amount 
Individual  INR  4.5 Lakh
Joint  INR  9 Lakh
Minor  INR  3 Lakh

 

  • Nominee –If you choose to open an account under the Monthly income scheme in Post office then you get a facility to nominate the beneficiary after you. The nominee can claim all the benefits provided under your account. 
  • Transfer your account – Accounts related to the Post Office Monthly Income scheme can be transferred at the request of the Account holder to any post office branch. 
  • Bonus under Post Office Monthly Income scheme – The 5% bonus was available only for the account holders, who opened their account before 1st December 2011. The accounts opened thereafter are not eligible for the bonus offered under this scheme. 
  • Tax benefit – The Monthly Income scheme in the post office does not provide many tax benefits as it is not subject to Section 80/C under the income tax act.

Other Key points of Monthly Income Scheme in Post Office

  • If you use a cheque to open an account under the monthly income scheme in post office then the date notified on the cheque will be considered as the Account activation date. 
  • Under the monthly income scheme in post office, if you open a joint account with a partner, then you both will have an equal share in it.
  • There is no definite number of single/joint accounts one can hold under the monthly income scheme in post office but it is subject to the total balance deposited in each account. 
  • If you are a minor and want to open an account under the monthly income scheme in post office then you can do so, and you can convert that minor account into an adult account after you turn 18. 
  • The post office monthly income interest rate will be credited directly to your saving account by the India post monthly. 
  • The Post office monthly income interest rate continues till 2 years after your account under monthly income scheme in post office matures and you do not decide to withdraw it. The Post office monthly income interest rate will be equal to the standard interest rates on saving account.

Post Office Monthly Income Scheme: Documents Required

Here is the list of documents required to open an account under Monthly income scheme in Post office

  • You need identity proof issued by the Indian Government like Passport/ Aadhar card/ Driving License/ Voter ID, etc. 
  • You need address proof like an Identity card or any recent utility bill.
  • You need your recent Passport size photographs.

How to open an account under Monthly Income Scheme in Post Office

The steps to open an account under Monthly Income scheme are given below, please read carefully

  • To avail of the Monthly income scheme in post office, you need to open a savings account in the nearby post office first. If you have an account already then no need to open another account.
  • You have to fill an application form related to the Monthly Income scheme in Post Office from the post office itself or you can download it online.
  • You need to fill in all the mandatory details asked, please carry all the documents and their photocopy for verification purposes. 
  • Read all the provided information carefully, like name, date of birth, and contact details. 
  • Self- attest( sign) all the documents 
  • Deposit the intended amount you want to save in the account. The minimum amount should not be less than INR 1500/-
  • You can deposit the money with a cheque or with cash.

How Does the Post office monthly income scheme interest rate work

The post office monthly income scheme interest rate explained with example-

  • After you open an account under Monthly income scheme in post office, you have to deposit a minimum of INR 1500/- to avail of the Post office monthly income scheme interest. The maximum amount to be invested under Post office Monthly income scheme is INR 4,50,000/-. 
  • If you want to open a joint account under Monthly income scheme in Post office then you can deposit a minimum of INR 1500/-. The maximum amount to be deposited under join account for monthly income saving scheme is INR 9, 00,000/-. 

Suppose you deposit INR 1,00,000 /- and select the maturity period for 5 years then the post office monthly income scheme interest rate under 6.60% will give you the additional benefit of INR 550. After your saving account under Post Office, Monthly Income Scheme reaches maturity, you get your deposited amount back with additional Post office monthly Income scheme interest.

How Post Office Monthly income scheme is unique from another monthly income scheme 

The monthly income scheme is different from mutual funds and Insurance monthly income plans- 

Post Office Monthly income scheme Mutual Funds  Insurance Monthly Income Plan
  • Monthly income is fixed 
  • 6.60%  Post office monthly income interest rate 
Debt and equity-based  (20:80 ratio) A plan especially for the retirement.
Monthly income is guaranteed  Monthly income is not guaranteed Monthly income is definite and guaranteed 
Tax on Post office monthly income interest rate Taxable(Monthly annuity)
Fixed Returns  No fixed Returns Not focused on returns 
cap on the maximum amount  No cap on the maximum amount  No cap on the maximum amount 

How Monthly income scheme in post office is unique from National Savings Certificate and Bank Fixed Deposit

The post office monthly income scheme is different from the national savings certificate and bank fixed deposits. Let’s see how unique the Monthly income Scheme is from the national saving certificate and Bank Fixed deposit. 

The mentioned table clears the difference between these three saving schemes- 

Parameters Post Office Monthly income scheme National Savings Certificate Bank Fixed Deposit
Interest Rate Fixed Interest rate (6.60%) Fixed interest rate (6.8%) Fixed interest rate (5.1 -7.25%)
Returns Monthly returns are guaranteed  Returns are assured Returns are assured
TDS Tax deduction at source (TDS) is not applicable  TDS is not applicable  TDS Applicable 
Maximum amount Upper Limit on amount  No limit  No limit
Risk Very low risk  Low risk Zero Risk 
Withdrawal Premature withdrawal with Penalty Only available for exceptional cases  Premature Withdrawals with the penalty 
Maturity period Maturity time -5 years  5 years and 10 years 10 days to 7 years

Withdrawal of the Monthly income Scheme in Post Office Prematurely

In case if you want to close your account under monthly income scheme in Post office before the completion of the 5 years, then you have to follow the following terms and conditions –

  • The 2 % of discount is applicable on the premature closure of accounts between 1-3 years under Post Office Monthly Income Scheme. 
  • 1% of discount is applicable in case the account under the Monthly income scheme in the post office is closed between 3-5 years.

Post Office Monthly Income Scheme Interest Rate – FAQs

Q1. Can I nominate someone as a beneficiary under Post office Monthly Income Scheme? 

Ans. Yes, the monthly scheme in Post office allows you to nominate someone as a beneficiary after you. 

Q2. : After the completion of the tenure period of my monthly income scheme in Post office, how can I withdraw money from it?

Ans. You have two options; either you can go directly withdraw your amount from the post office or you can get it credited via ECS. You can withdraw the money on monthly basis too. However, the facility to collect and withdraw the whole amount altogether is available 

Q3. I want to transfer my account under the post office monthly income Scheme, is it possible?

Ans. Yes, you can transfer your account under the monthly scheme in Post Office; all you have to do is contact the post office. 

Q4. If I want to invest in the Monthly income scheme in post office, can I do that?

Ans. Yes, you can re-invest in the Post office monthly Income scheme after your account matures under the scheme. 

Q5. Is Tax deduction at source applicable to Post Office Monthly Income scheme?

Ans. No, TDS does not apply to the Monthly income scheme in post office. You get a tax deduction on the earned interest only. 

Q6. Is a senior citizen allowed to invest under Post office Monthly Income scheme?

Ans. Yes, both senior citizens and retired people are eligible for the Monthly income scheme in post office.  

Q7. What happens if I do not withdraw money from my Post office Monthly income scheme account?

Ans. You will keep receiving the general interest rate applicable up to 2 years under the Monthly income scheme in post office. 

Q8. Can I withdraw money from the Post office Monthly income scheme before the maturity period?

Ans. Yes, you can withdraw money from the post office monthly income scheme however a penalty fee is applicable. 

Q9. Is Post office monthly income scheme interest rate decided by the Government of India?

Ans. Yes, the interest rate under the monthly income scheme in post office is decided by the Indian Government. 

Q.10 Can a minor open an account under Post office Monthly Income scheme?

Ans. Yes, a minor above the age of 10 years can open an account under post office monthly income scheme.

Q.11 What is the minimum amount to open an account under post office monthly income scheme?

Ans. The minimum amount to open an account under the post office monthly income scheme is INR 1500.

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