All You Wanted To Know About Post office Monthly Scheme (PO MIS)

All You Wanted To Know About Post office Monthly Scheme (PO MIS)

The post-office monthly income scheme (MIS) provides for monthly payment of interest income to investors. It is meant for investors who want to invest a sum amount initially and earn interest on a monthly basis for their livelihood.  This scheme offers monthly income and is a safe, guaranteed-by-the-government option. The MIS is not suitable for an increase in your investment. It is meant to provide a source of regular income on a long term basis. The scheme is, therefore, more beneficial for retired persons. The MIS is not suitable for an increase in investment. It is meant to provide regular income on a long term basis.

Who is eligible to open the account?

Only individuals can open the account. Only one deposit is available in an account either single or joint (two or three).

Minimum and Maximum Investment

The minimum investment in a Post-Office MIS is Rs 1,500 for both single and joint accounts. The maximum investment for a single account is Rs 4.5 lakh and Rs 9 lakh for a joint account.

Duration
The duration of MIS is six years.  

Interest

The post-office MIS gives a return of 8% interest on maturity. A 5% bonus is paid on maturity of the fund, therefore, the effective yield works out to 8.9% per year.

Tax Benefit                     

The interest earned is fully taxable. There is no tax deducted at source (TDS). The investment in PO MIS is exempt from wealth tax.

Withdrawal
Premature closure of the account is permitted any time after the expiry of a period of one year of opening the account. Deduction of an amount equal to 5 per cent of the deposit is to be made when the account is prematurely closed. Investors can withdraw money before three years, but a discount of 5%. Closing of account after three years will not have any deductions. Post maturity Interest at the rate applicable from time to time (at present 3.5%). Monthly interest can be automatically credited to savings account provided both the accounts standing at the same post office.

How to Open PO MIS Account

You can open a post office MIS at any post-office in India. When you open an MIS, you will get a certificate issued by the post office. In addition, the investor is provided with a passbook to record his transactions against his MIS.

Nomination
You can specify the nominee at the time of opening the account, or at any time later.

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