One can choose from a host of short and long-term investment schemes depending on one's needs and plans. Some of these schemes offer lucrative interest rates, while others provide tax exemptions or deductions to investors.
To help individuals save for their retirement and take care of the crisis that could arise in the future, the government of India along with public sector financial banks launched Post Office schemes. One can choose from a host of short and long-term investment schemes depending on one’s needs and plans. Some of these schemes offer lucrative interest rates, while others provide tax exemptions or deductions to investors.
One among them is the Post Office Monthly Income Scheme which allows investors to set aside a specific amount of money for a 5-year investment term. The interest is calculated at the appropriate rate and is paid out to the investor on a monthly basis. The current interest rate from July 2019 is 7.6 per cent per annum payable monthly. The popularity of this small savings scheme both in the rural as well as urban areas is because of its guaranteed return on the investments.
Here are 10 things you need to know about the Post Office MIS:
- The maximum investment that can be made in this monthly income scheme is up to Rs 4.5 lakh in a single account and up to Rs 9 lakh in the case of a joint account. However, an individual can invest a maximum of Rs 4.5 lakh as their share in a joint account.
- The current interest rate offered is 7.6 per cent per annum payable monthly, from July 2019.
- Joint MIS account can be opened by 2 or 3 adults, and all joint account holders have to have an equal share in each joint account. A single account can also be converted into a joint account and vice versa.
- MIS account can be opened either by cash or cheque. In the case of opening the account by cheque, the date of realization of cheque in government account should be the date of opening of the account.
- Nomination for the MIS account can be done either at the time of opening the account or even after the opening of the account. The MIS account can also be transferred from one post office to another.
- Even though the scheme allows an individual to open any number of accounts in any post office, but the maximum investment has been limited by adding balance in all the accounts.
- MIS account can also be opened in the name of a minor. Also, after the minor crosses 10 years of age or minors above that age can open and operate the account by themselves. However, after attaining majority, a minor has to apply for conversion of the account to his/her name.
- The maturity period of the Post Office Monthly investment scheme is 5 years.
- The interest from the MIS is auto-credited into the savings account of the depositor standing at the same post office, either through PDCs or ECS. In the case of this account standing at CBS Post offices, the monthly interest can also be credited into the savings account at any CBS Post offices.
- Depositors can prematurely en-cash their deposits with a discount/deduction from the deposit of 2 per cent of the deposit if en-cashed within 1 to 3 years, and if en-cashed after 3 years, a discount of 1 per cent of the deposit is charged.