Post Office Monthly Income Scheme: 10 things you need to know before you start investing

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Published: May 10, 2019 5:49:45 PM

Most of these schemes can be started with minimal investment amounts, which make these schemes popular as an investment option in India.

todays news, india news, Post Office, Post Office MIS, MIS, Monthly Income Scheme, Investment, ReturnThe features and benefits of these schemes vary and depending on one’s need, one should opt for these schemes.

Run by the Ministry of Communications, India Post offers nine small saving investment schemes, according to its website, indiapost.gov.in. The multiple savings schemes include Post Office Monthly Income Scheme Account (MIS), Post Office Savings Account, Post Office Time Deposit Account (TD), 5-Year Post Office Recurring Deposit Account (RD), Senior Citizen Savings Scheme (SCSS), National Savings Certificates (NSC), 15 year Public Provident Fund Account (PPF), Sukanya Samriddhi Accounts, and Kisan Vikas Patra (KVP).

Most of these schemes can be started with minimal investment amounts, which make these schemes popular as an investment option in India.

The features and benefits of these schemes vary and depending on one’s need, one should opt for these schemes. For instance, the Post Office Monthly Income Scheme (POMIS) is a low-risk monthly investment scheme that generates steady income. The investment period is 5 years and investors can invest up to Rs 4,50,000 individually or jointly Rs 9,00,000. Interest rate is 7.7 per cent per annum, payable monthly, for the quarter ending 31 March 2019.

Before investing know the features and benefits of the Post Office Monthly Income Scheme:

1. As this is a government-backed scheme, your capital is protected by the government. Until maturity, your money is safe. These are also low-risk investments. Being a fixed income scheme, the money invested by borrowers is not subject to market risks and is safe.

2. The tenure for Post Office MIS comes with a lock-in period of 5 years. When the scheme matures, you can either withdraw the amount or reinvest it.

3. You can start investing with a nominal initial investment of Rs 1,500. Gradually, you can also multiply this amount.

4. Note that the returns from this investment are not inflation-beating. However, they are higher compared to other fixed-income investments like Bank Fixed Deposits. You will earn guaranteed returns in the form of interest every month.

5. Your investment does not fall under Section 80C. The income is subjected to taxation. However, it has no TDS.

6. Investors receive the payout starting from one month from making the first investment. The payouts come at the end of every month, not the beginning.

7. Investors can also open more than one account in their name. One can have multiple account ownership, but the total deposit amount cannot exceed Rs 4,50,000 in all of the accounts together.

8. Investors can also open a joint account with up to 3 people. The account belongs to all account holders equally, irrespective of who is making the contributing.

9. Investors can also start an account on behalf of a minor, aged 10 or above. The minor can avail the funds when they reach 18 years. The investment, however, cannot exceed Rs 3,00,000 in the case of a minor.

10. As the account holder, you can nominate a family member or a beneficiary, who will be able to claim the benefits and corpus in the future.

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