Prepared by Finin2min Editorial Desk · Rates and rules verified 5 October 2026
The Post Office Monthly Income Scheme pays 7.4% a year as monthly income for 5 years and returns the principal at the end. Check your monthly payout, the tax on it, the effect of reinvesting the interest and the cost of closing early.
POMIS pays simple interest every month: monthly interest = deposit × rate ÷ 12. On ₹9,00,000 at 7.4% this is ₹5,550 a month (₹66,600 a year, ₹3,33,000 over five years). The principal comes back at the end of 5 years. Monthly interest is not compounded, so un-withdrawn interest earns nothing extra; if you reinvest it in an RD or a debt fund the overall yield rises.
The account cannot be closed before 1 year. Between 1 and 3 years, 2% of the deposit is deducted; after 3 years, 1% is deducted. Interest already received is not recovered after the first year.
₹9,00,000 at 7.4%: monthly income ₹5,550; total interest over 5 years ₹3,33,000. If you reinvest each month’s interest at 6.7% p.a. the interest corpus grows to ₹3,94,270 by maturity, lifting the overall yield to about 7.54% a year.
7.4% per year, paid monthly, for the October-December 2026 quarter. The rate on the date you open the account applies for the 5-year term.
₹9 lakh in a single account and ₹15 lakh in a joint account (up to three adults), across all MIS accounts.
Yes. The interest is taxed at your slab rate. There is no 80C deduction and no TDS by the post office, but you must declare the interest.
Yes after one year: 2% of the deposit is deducted if closed before 3 years and 1% after that.
Yes. The principal is returned at the end of 5 years along with the last month’s interest.
Rates and rules shown here were checked against the sources above on 5 October 2026. Government notifications can change a rate or rule at short notice; always confirm on the official site before you invest, file or claim.
Educational estimate only. Tax, legal, financial or regulatory treatment depends on facts and the law applicable to the relevant period. Verify the current official source or obtain professional advice before acting.
Scope: Monthly income, tax and early-closure effects of a Post Office MIS deposit.
The calculation engine was checked against an independently written reference implementation across 192 POMIS input combinations, and against published figures where the scheme publishes them. Review date: 5 October 2026.
Prepared by Finin2min Editorial Desk. Educational estimate only.
Background, worked examples and the rules behind these numbers.