Post Office MIS: The Post Office runs several schemes that offer significant benefits. You have likely heard of the Monthly Income Scheme (MIS). It is a small savings scheme that guarantees regular income alongside a secure investment. In return, the investor receives a fixed monthly income in the form of interest.
This scheme requires only a one-time investment. It has a maturity period of five years. Investors earn a monthly income and receive the full amount deposited back upon maturity. If you wish to invest your hard-earned money where it yields substantial returns, the Monthly Income Scheme is an excellent option.
Post Office
Key Features of the Monthly Income Scheme
The Post Office Monthly Income Scheme can prove to be a great choice for you. This government scheme is unaffected by market fluctuations, ensuring your money remains completely safe. It has long been popular among middle-class families because it provides a reliable source of regular income without any risk.
In the Post Office MIS, the investor deposits a lump sum and receives a fixed monthly income as interest. The scheme currently offers an annual interest rate of 7.4%. While the interest is calculated on an annual basis, it is credited to your account every month.
How Much Interest Will You Earn?
If you invest ₹1 lakh in the Post Office Monthly Income Scheme, you will earn an annual interest of ₹7,400 at a rate of 7.4%. When distributed over 12 months, this results in a monthly income of approximately ₹617. Thus, depositing ₹1 lakh guarantees a monthly income of around ₹617.
The maturity period for the Post Office Monthly Income Scheme is five years. Investors receive monthly interest payments throughout this five-year tenure, and the principal investment amount is returned upon maturity. This ensures both the safety of the investment and a steady stream of income.
Option for Single and Joint Accounts
Under the Post Office MIS, a maximum of ₹9 lakh can be invested through a single account, whereas the investment limit for a joint account is ₹15 lakh. If an individual deposits the maximum amount of ₹15 lakh in a joint account, they will earn a substantial guaranteed monthly income of ₹9,250 at an interest rate of 7.4%.
Another key feature of this scheme is that it remains unaffected by market fluctuations. Unlike the stock market or mutual funds, there is no risk involved. The interest rate is determined by the government, ensuring a fixed return for the investor.
The scheme also allows for premature withdrawal of funds in case of an emergency. However, withdrawals are strictly prohibited before the completion of one year from the account opening date. If the account is closed after one year but before three years, a 2% deduction is made from the principal amount, and the balance is refunded.
If the funds are withdrawn after three years but before the completion of the five-year tenure, a penalty of 1% is deducted from the principal amount.
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