- Unique scheme which offers guaranteed fixed monthly income on the lump sum investment made by the investor.
- Any resident individual can open the MIS account in single or joint holding pattern. A minor can also invest in this scheme. If minor is of more than 10 years, then he can even operate the account.
- Minimum limit for investment is Rs.1500 and maximum investment limit is Rs.4.5 lakhs in single holding account and Rs.9 lakhs for joint accounts.
- This scheme currently offers a rate of interest of 7.6% per annum payable monthly with the maturity period of 5 years. For example, Mr. Suresh invests Rs. 2 00,000 (or Rs 2 lakhs) in Post Office Monthly Income Scheme. He will receive Rs.1300 every month as an interest for 5 years. He will receive back the deposit on completion of the tenure. Amount so received monthly can also be further invested in post office recurring deposits.
- Investor can hold multiple accounts with maximum investment of Rs.4.5 lakhs by combining balances in all the accounts. Joint accounts will have equal shares from all holders. If we continue with the above example, Mr. Suresh would be able to open a joint account with his wife for a maximum amount of Rs.2.5 lakh.
- The scheme also offers liquidity by allowing investors to withdraw the deposit after 1 year. However, there will be a penalty of 2% on deposit if withdrawn between 1 year- 3 years and 1% penalty on withdrawals after 3 years.
- Accounts are transferable from one post office to another across the country.
There is no major tax benefit in this scheme. Interest received on monthly basis is a part of taxable income. There is no TDS on the interest payout and deposits are exempt from wealth tax. This Scheme is a preferable choice for risk-averse investors looking for regular monthly income.