The post office offers several small savings schemes that are quite attractive. One such investment scheme is the Post Office Monthly Income Scheme (MIS), which provides you with monthly income. The special thing about this scheme is that you can start investing with just ₹1000. However, there are certain rules and conditions that investors need to follow. Opening an account and investing under this scheme is very easy. You can apply to open an account at your nearest post office.
Who Can Open an Account
Any single adult can open a Post Office Monthly Income Scheme account. Additionally, three adults can jointly open an account. Moreover, if a minor is over 10 years old, they can also open an account and invest under their name. Also, an account can be opened by an appointed guardian on behalf of a minor or a person with an unsound mind.
Investment Limit
In this scheme, you can start with a minimum of ₹1000 and invest in multiples of ₹1000. However, there is also a maximum investment limit. A single account holder can invest up to ₹9 lakh. If you have a joint account, you can deposit up to ₹15 lakh. It’s important to note that in a joint account, all joint holders have equal ownership. The limit for an account opened by a guardian on behalf of a minor will be different.
Interest Rate
Currently, the Post Office Monthly Income Scheme offers an annual interest rate of 7.4% on the deposited amount. The interest is paid one month after the account opening date. This cycle continues until maturity. If the account holder does not claim the due interest every month, no additional interest will be provided. Also, if any additional amount is deposited by the depositor, it will be refunded, and interest will only be applicable on the Post Office savings account from the date of deposit until the refund date. According to the official India Post website, the interest is auto-credited into the same post office or savings account. Keep in mind that tax is applicable on the earned interest amount.
Maturity Period
Under the Post Office Monthly Income Scheme, the account can be closed after 5 years from the date of opening by submitting the prescribed application form along with the passbook to the concerned post office. If the account holder passes away before the maturity period, the account can be closed, and the amount will be returned to the named nominee/legal heirs. The interest is paid until the previous month, including the refunded amount. However, any deposited amount cannot be withdrawn before 1 year from the date of deposit. If the account is closed after 1 year but before 3 years from the opening date, a penalty equal to 2% of the principal will be applied, and the balance amount will be returned.
