Post Office Monthly Income Scheme: what is it all about?

Retired professionals and even those planning their retirement funds look for options that offer steady monthly income. An investment plan that guarantees fixed returns is the monthly income scheme. You receive decent interest rates yearly. You can avail of these returns as a fixed monthly income. The most experienced investors consider MIS as one of the best investment options as they provide the following benefits –

  • The monthly income plan keeps your capital intact.
  • It also makes sure the customers receive a fixed monthly income.
  • It offers better returns than investment instruments which are debt-based.

One such investment plan is the post office monthly income plan. You earn attractive interest rates. Plus, it is a five-year plan and available across all post offices in India. If you are a risk-averse individual and seeking to earn decent profits, then consider the post office schemes. They are not much popular in urban areas. The urban Indian population always opt for fixed deposits and other debt options which generate monthly income.

However, the MIS offered of the Indian postal office provides a host of benefits to the investors. Remember, the post office is still the largest banking service provider in the country. Considering the Ministry of Finance governs them; it provides greater credibility than other avenues.


Typically, the duration of the monthly income scheme is five years. So, you can withdraw the funds ideally after the tenure ends. By the end of the term, you receive all the funds which were invested in the scheme. You get the benefit of fixed monthly income for the entire duration. If you wish to withdraw funds before five years, the following benefits are payable –

  • If you withdraw before a year, you receive no benefits
  • If you remove between one to three years, you get the entire deposit with two per cent penalty deduction
  • Withdrawal after three years means you get the entire deposit with a per cent penalty deduction

The other features include –

  • Investments are risk-free
  • You can nominate another individual to avail of the benefits in the event of the death of the owner
  • The monthly income plan also has provisions of recurring deposit into which the funds can be moved
  • Minors can also apply for the scheme
  • The transfer of MIS from one post office to the other is hassle-free and free of cost
  • For every deposit you make at the post office, a separate account gets opened. The best part of the scheme is you can hold multiple accounts and maximum account balance you can maintain is INR 4.5 lakh
  • The maturity money you receive at the end of the investment can get reinvested in post office monthly income plan
  • No tax deduction at source, but the interest earned through the scheme is taxable
  • You can open the account either through cash or cheque. If you open the account via cheque, the date of realisation of the cheque by the Government is the opening date of the account

If you are in for a joint account, you can do with two to three adults. Every account holder in the joint account gets an equal share

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