Post Office MIS Explained: Earn Fixed Monthly Income with This Safe Government Backed Scheme

Kokila Chokkanathan
🏦 What Is the Post office MIS?

The Post office Monthly Income Scheme (MIS) is a government‑backed fixed‑income savings plan where you deposit a lump sum with the post office and receive guaranteed monthly interest for a fixed tenure.

✔️ Tenure: 5 Years
✔️ Interest Payout: Monthly (credited to your account)
✔️ Risk Level: Very low (100% government‑guaranteed)

💰 Interest Rate & Returns

The interest rate is reviewed by the government of india every quarter. The current rate is around 7.4% per annum, paid monthly.

Example (approximate):

  • ₹1,00,000 investment → ~₹617 per month
  • ₹5,00,000 investment → ~₹3,083 per month
  • ₹9,00,000 investment (maximum for single account) → ~₹5,550 per month
So, a higher lump‑sum deposit generates a higher monthly income (but the rate stays fixed for the tenure).

📊 How Much Can You Invest?

  • Minimum investment: ₹1,000 (you can start with small amounts)
  • Maximum investment (single account): ₹9,00,000
  • Maximum (joint account): ₹15,00,000 (up to 3 adults)
Joint accounts are common for couples, as they allow a larger total investment and higher monthly interest.

🪙 How You Get Paid

Once the account is opened:

  • Interest starts being paid one month after investment.
  • Every month, your interest amount is credited directly to your savings account at the post office or linked bank account.
Unlike many fixed‑income plans that pay quarterly or annually, MIS gives monthly cash flow, which can help with regular expenses like bills or household needs.

📉 Premature Withdrawal Rules

While the full tenure is 5 years, you can exit early after the first year — but there are penalties:

  • 1–3 years: 2% penalty on the principal
  • 3–5 years: 1% penalty on the principal
If you withdraw before 1 year, you may not get any interest.

📌 Key Benefits

✔️ Safe and Government‑Backed

Your capital is fully secured by the government of india — MIS is reliable even when markets fluctuate.

✔️ Steady Monthly Income

You receive fixed monthly interest, ideal for budgeting and meeting recurring expenses.

✔️ Affordable & Flexible

You can start with as little as ₹1,000 and invest more as per your capacity.

✔️ Joint Account Facility

Couples and family members can open a joint MIS to increase total investment and monthly returns.

🧾 Tax and Other Things to Know

  • Interest earned is fully taxable under “Income from Other Sources.” (No tax deduction under Section 80C.)
  • No TDS is deducted at source on MIS interest, though you must report it while filing income tax returns.
📌 Who Is It Best For?

MIS is particularly suitable for:

  • Retired individuals seeking steady cash flow
  • Homemakers and those without regular salary
  • People who want government‑backed safety and uncomplicated returns
  • Those needing monthly income for living expenses
In Summary

The Post office Monthly Income Scheme (MIS) offers a simple and secure way to earn fixed monthly income through government‑assured interest. With reasonable deposit limits, monthly payouts, and easy accessibility — it’s a solid choice for conservative investors who value stability and predictability over market volatility.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.

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