Post Office Monthly Income Scheme: Eligibility, Interest Dates, and Tax Benefits

Post Office Monthly Income Scheme: Saving monthly income scheme by post offices, was set up as a saving option. The scheme is also called National Savings (Monthly Income Accounts).

Any adult can open an account in his name or on behalf of a minor or person of unsound mind as the guardian. You may also open a joint account, meaning that you and another person may operate it together. One can have as many POMIS accounts as he wants but only 4,50,000 Rs deposit can be made in individual account while 9,00,000 Rs deposit in joint account.

Maximum deposit limits were raised during the budget for 2023-24. Now one can save upto ₹9 lakhs in single accounts which earlier was ₹4.5 lakhs. Joint accounts now have a limit of ₹15 lakhs instead of ₹9 lakh. Currently rate of interest is 7.4%.

We will discuss the Post Office Monthly Income Saving Scheme in detail here including eligibility, interest rates, interest rates in 2023, withdrawals, maturity and tax benefits.

Who can open Post Office Monthly Scheme?

The Post Office Monthly Income Scheme (POMIS) is a versatile savings avenue that can be availed by various types of individuals. You may be an adult saving in your own name; a guardian on behalf of a minor or person of unsound mind; a joint holder with another adult etc. This scheme permits multiple accounts to be opened subject to overall ceiling limits. These limits are Rs 4.50 lakh for single ownership and Rs 9 lakh for joint holdings.

Minors who can manage their accounts may also open POMIS accounts, with minimum deposit of Rs 1,000/- which can be made in multiples of hundreds at convenience. Note that when there are multiple account holders, the entire deposit limit is applied proportionately among such holders so as not to breach the amount prescribed for any one person’s account. In case you inadvertently exceed maximum allowable investment, then it would have to be withdrawn forthwith and till such withdrawal date it shall earn interest at rate applicable to Post Office Savings Bank accounts.

1. Individual Account: Any person can open an account in their own name.

2. On Behalf of a Minor or Person of Unsound Mind: If you are the guardian of a minor (someone under 18 years old) or a person of unsound mind, you can open an account for them.

3. Joint Account: You can also open a joint account with another person, and in some cases, with more than one person. In joint accounts, the maximum deposit limit is important.

4. Multiple Accounts: An individual can open more than one Post Office Monthly Income Scheme. However, the total amount deposited in all of these accounts should not exceed Rs.4,50,000 individually and Rs. 9,00,000 in a joint account.

Budget 2023-24 Monthly Savings Scheme Update:

  • Single Accounts: It’s now possible to save more money in a single account. The upper limit of deposits has been raised from Rs. 4.5 lakh to Rs. 9 lakh which means you can save up to rupees nine lakh alone in this scheme.
  • Joint Accounts: In case you are saving with someone else through a joint account, the maximum amount that can be deposited has been increased from Rs. 9 lakh to Rs 15 lakhs thus giving families or partners who save together more flexibility.

What this means simply is that the government allows you put aside more funds into your monthly saving schemes; whether as an individual or jointly with others so that higher amounts of money may be saved towards securing one’s financial future.

5. Minor Opening an Account: A minor who has attained such age as they can understand and operate their own finances shall be allowed under his/her name

6.Minimum Deposit: You need to deposit at least Rs.1000/- for opening an account and thereafter any amount may be deposited in multiples of Rupees One Hundred only.

In simple words, Post Office Monthly Income Scheme can also be opened by an individual or guardian on behalf of a minor including joint accounts but don’t exceed maximum deposit limits! Initial minimum deposit is Rs 1000 while subsequent deposits must be made in multiples of hundred rupees each; if excess put amount will have both principal sum repaid back together with accrued interest which it earned during its stay there too being paid out!

Please note that when fixing the ceiling limit for joint account deposits each joint holder share shall be taken as half where there are two holders and one third where three holders exist so as not let total deposits exceed approved figures.

If you have deposited more than what is required then they would ask for withdrawal of surplus amount whose interest will run at post office savings bank rates from date of its deposit till date of withdrawal.

Important Information about Joint Accounts and Excess Deposits

  • Sharing the Deposit Limit: In a joint account, the maximum deposit limit is divided equally when there are two joint holders, and each one’s share is considered as half. With three joint holders, it is split into thirds so no more than the allowed limits can be kept in a single account.
  • Exceeding the Deposit Limit: If for example in a shared savings account both individuals put together an amount larger than Rs 9 lakhs, then they will need to withdraw any excess over this limit.
  • Interest on Excess Deposit: The additional funds that have been deposited beyond what was allowed for still earn interest but at rates prescribed under post office saving bank scheme from date of such deposits till withdrawal thereof being made or earlier if so demanded by an authorized officer having regard also towards provisions contained under Rule 8(6)(A)© read with Rule 18(3).

To put it simply, when you open a savings account with someone else (known as joint ownership), there are restrictions placed on how much money can be deposited based on who has access to said funds. For instance – if I were to open up my personal savings accounts alongside another person then we would share them equally which means that half of their worth belongs to each individual involved. Similarly; should more than two people choose this option simultaneously then these accounts become divided equally among all parties involved thus making it impossible for any party exceed their given portion without exceeding its imposed limits too..

Where You Can Open a Monthly Income Account?

There are several options where you can start a Monthly Income Account:

  • Authorised Post Offices: You can visit any post office which is authorized to provide savings bank services. They will assist you in opening a Monthly Income Account.
  • Public Sector Banks: Apart from this, you may also visit public sector banks such as SBI, Bank of Baroda or Punjab National Bank for opening up an NSC/Post Office monthly income scheme account (POMIS).
  • Specific Private Banks: Also another option is that some private banks like ICICI bank limited , Axis Bank Ltd (formerly known as UTI) or HDFC Limited . These financial institutions have the permission to let people start monthly income accounts with them.

Aadhaar Requirement for Post Office Monthly Account Scheme 

  • For New Applicants:- If you are applying for Monthly Income Account for the first time, it is necessary to have Aadhaar Number. You can provide proof that you have applied for Aadhaar if you haven’t received your card yet as long as you have enrolled for it.
  • For Existing Account Holders:- If a person already has a Monthly Income Account, then they should also give their Aadhaar number. When people who had an account earlier want to link their Aadhaar number with it, they need to provide their Aadhaar details.


You can appoint a nominee for the account. This implies that if anything happens to you, the person you select will have ownership of the account or its proceeds. Thus, nomination is allowed under Post Office Monthly Account Scheme.

Period of Maturity

Post Office Monthly Income Account matures in 5 years since its establishment. Hence, one must maintain funds in this account for such period to enjoy some benefits or make penalty-free withdrawals.


  • Post One Year: You can withdraw from your monthly income saving plan operated by the post office after one year but at a 2% cut-off. That means you will get 2% less than what you have accumulated.
  • Post Three Years: If you postpone for three years before making any withdrawal then the rebate is reduced to 1%. Therefore, when you decide to pull out, you will be paid 1% of your total savings less.

Put simply, if money is taken out within first year there would be slight reduction caused by two percent discount and waiting until three years cuts this down to one percent.

Post Office Monthly Income Scheme Interest Rates

Interest Rates Based on Deposit Periods: The interest rate you earn on your Post Office Monthly Income Account Scheme depends on when you made your deposits.

  • The current interest rate is 7.4% (Please refer official website to check the latest updates on interest rates here)
  • For deposits made from October 1, 2022, to December 31, 2022, the interest rate is 6.7%.
  • For deposits made from April 1, 2022, to September 30, 2022, the interest rate is 6.6%.
  • For deposits made from July 1, 2019, to March 31, 2020, the interest rate is 7.6%.
  • For deposits made from October 1, 2018, to June 30, 2019, the interest rate is 7.4%.

Similar interest rates apply for deposits made in other periods mentioned.

Frequency of Interest Payment: You get your interest each month, and you can take it in cash or as a check. If you would prefer this over other options. Or else, if you so wish, have the monthly interest credited to your Savings Account with Post Office.

Rounding Off of Interest Amount: The interest will be calculated up to the nearest whole rupee that is higher. For example, if the interest is Rs 123.50 then it will become Rs 124.

CBS Platform and Monthly Interest: In case where Core Banking Solution (CBS) enabled Post Offices or Banks are holding accounts; If required by you authorize so that earned monthly interest can be credited into savings account directly .

Interest After Maturity: When an account matures (i.e., completes five years) but not withdrawn yet; such account shall continue earning at prevailing rate applicable to Post Office Saving Bank Accounts till its withdrawal .

Tax Information

  • Deduction 80C: The investment made in this scheme does not qualify for tax benefits under Section 80C of the Income Tax Act. This means you won’t be able to claim deductions for the amount you invest in this scheme when calculating your taxable income.
  • TDS: Additionally, there is no Tax Deducted at Source (TDS) applied to the interest or the withdrawals from this scheme. You won’t have any tax automatically deducted from your monthly income or the amount you withdraw when your investment matures.

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