Post Office Monthly Income Scheme higher investment limit from April 1, 2023: How to open POMIS account, interest rate

The limit for single account users under the Post Office Monthly Income Scheme (POMIS) has increased from Rs 4 lakh to Rs 9 lakh and the maximum for joint holding has been raised from Rs 9 lakh to Rs 15 lakh, according to the Budget 2023 announcement. This budget proposal is yet to become the rule as the Finance Bill is yet to be passed.

Monthly Income Scheme (MIS)
Under the MIS, individual who opens a MIS will get interest payments every month. The interest rate for this program is revised by the government every quarter. For the current January – March 2023 quarter, interest rate is 7.1%. The minimum investment is Rs 1000 and in multiples of Rs 1000.

Also read: Invest up to Rs 30 lakh in Senior Citizen Savings Scheme from Apr 1, 2023: What is SCSS, tax benefits, withdrawals, interest rate

How to open Post office monthly income scheme
Interested individual can open Post office MIS by submitting the following documents
Submit the following forms/documents duly signed and filled at desired Post Office.

• Account Opening Form
• KYC Form (For new customer/modification in KYC details))
• PAN Card
• For Joint Account, KYC documents for all joint holders to be submitted.

Aadhaar card, if aadhar is not made available the following document may be submitted.
1. Passport
2.Driving license
3. Voter’s ID card
4. Job card issued by MNREGA signed by the State Government officer
5. Letter issued by the National Population Register containing details of name and address.
Proof of date of birth/birth certificate in case of minor account. (Birth certificate is mandatory in Sukanya Samriddhi Account).

Interest payment
From the opening date until maturity, payment of interest is made at the end of each month. If the depositor made an extra deposit, the excess deposit will be reimbursed, and only PO Savings Account interest will apply from the day the account was opened to the date the excess deposit was repaid. Interest is taxable in the hand of depositor.

According to the India Post, “If the deposit is made on 29th, 30th and 31st of a month and if these dates do not come in the following month, the payment of monthly interest shall be made on the last date of the following month and if such last day is a holiday, monthly interest shall be paid on the preceeding day.”

POMIS tenure
The tenure of POMIS is 5 years. No deposit can be withdrawn before the year from the date of deposit has passed. A 2% reduction from the principle will be made and the remaining balance will be paid if the account is closed after one year but before three years from the date of account opening. If the account is closed after three years, 1% of the deposit will be withheld and the remaining amount will be paid.

The account can be closed, and the money refunded to the nominee or legal heirs in the event that the account holder passes away before the maturity. Interest will be paid up to the month before the refund is issued.
The deposit and the interest accrued will be paid after completion of five years from the date of the opening the account to the account holder on an application in Form-3.