Post Office Monthly Income Scheme pays 7.4% interest per year on a lump sum deposit, and the interest comes to the account every month for 5 years. This is a government-backed savings scheme run by India Post, so the capital stays safe and the monthly payout stays fixed for the full tenure. You can start with as little as ₹1,000, and the maximum deposit is ₹9 lakh for a single account and ₹15 lakh for a joint account.
The Finance Ministry announced on 30 June 2026 that the interest rate for the July to September 2026 quarter remains unchanged at 7.4% per annum. The rate has stayed at 7.4% since April 2023, and the rate fixed at the time of opening the account remains locked for the whole 5-year term even if the government revises rates in later quarters. Interest is paid every month and can be credited directly to the linked post office savings account or a bank account.
Post Office Monthly Income Scheme - Introduction
Post Office Monthly Income Scheme is a safe way to turn one lump sum into a regular monthly income. You deposit money once, and India Post credits interest to you every month for 5 years. At the end of the tenure, the full deposit amount is returned. Because the scheme is backed by the Government of India, there is no market risk and no chance of losing the capital.
The scheme suits retirees, senior citizens, and anyone who wants a steady monthly cash flow without touching the stock market. For example, a retired person can park savings in this account and receive a fixed amount every month like a pension. The account can be opened at any post office that handles savings schemes, and the same account can be moved to another post office if you shift to a different city.
Investment limits were raised in April 2023. A single account can now hold up to ₹9 lakh, and a joint account with up to 3 adults can hold up to ₹15 lakh. Earlier the limits were ₹4.5 lakh and ₹9 lakh. The minimum deposit is ₹1,000, and deposits are accepted in multiples of ₹1,000. The per-person cap of ₹9 lakh applies across all accounts held by one person.
Interest on the deposit is paid every month. At 7.4% per annum, a ₹9 lakh deposit earns about ₹5,550 per month, and a ₹15 lakh joint deposit earns about ₹9,250 per month. The payout starts one month after the deposit is made. The monthly interest is usually credited to a linked post office savings account, where it can be withdrawn or moved as needed.
Key Information
| Detail | Information |
|---|---|
| Scheme Name | Post Office Monthly Income Scheme |
| Interest Rate | 7.4% per annum, paid monthly |
| Tenure | 5 years |
| Minimum Deposit | ₹1,000 |
| Maximum Deposit | ₹9 lakh (single), ₹15 lakh (joint) |
| Nodal Ministry | Ministry of Finance |
| Application Mode | Offline at post office (by cheque) |
| Official Website | indiapost.gov.in |
Features of Post Office Monthly Income Scheme
These are the main features that make this scheme a popular choice for steady income:
- Fixed 5-year tenure: The account matures after 5 years from the date of opening, and the full deposit is returned at maturity.
- Single or joint account: One adult can open a single account, or up to 3 adults can open a joint account with equal shares.
- Nomination facility: Nomination can be registered for up to 4 people, and it is mandatory at the time of opening the account.
- Account transfer: The account can be transferred from one post office to another anywhere in India. As per the official India Post fee schedule, a transfer fee of ₹100 applies.
- No bonus on new accounts: Accounts opened after 1 December 2011 do not get any bonus, so the return is only the monthly interest.
- Taxation: The interest earned is taxable, and there is no tax deduction benefit under section 80C of the Income Tax Act.
Investment Limits and Interest Structure
The deposit limits depend on the type of account you open. The minimum deposit is ₹1,000, and the maximum limits are given below:
| Account Type | Minimum Deposit | Maximum Deposit |
|---|---|---|
| Single Account | ₹1,000 | ₹9,00,000 |
| Joint Account (up to 3 adults) | ₹1,000 | ₹15,00,000 |
| Minor Account (guardian or minor above 10 years) | ₹1,000 | ₹9,00,000 |
At the current rate of 7.4% per annum, a deposit of ₹1 lakh gives around ₹617 per month, ₹5 lakh gives around ₹3,083 per month, and the maximum single deposit of ₹9 lakh gives around ₹5,550 per month. The interest is credited to the linked post office savings account or bank account every month.
Eligibility
Any resident Indian adult can open an account in this scheme. There is no upper age limit, which makes it open to everyone from young earners to retired people. The rules for who can open the account are simple:
- You must be a citizen of India and a resident of the country.
- You must be at least 18 years old to open an account in your own name.
- You can open an account jointly with up to 3 adults.
Note: A minor above 10 years of age can open an account in their own name, and a guardian can open an account on behalf of a minor or a person of unsound mind. Once the minor turns 18, they should apply to convert the account into their own name to continue managing the funds.
Exclusions
This scheme is only for resident Indian citizens. Non-resident Indians (NRIs) cannot open a new account under this scheme. Trusts, firms, and institutions are also not allowed to open accounts in this scheme. If an account holder becomes an NRI during the tenure, the account is allowed to run till maturity but cannot be extended after that.
Application Process
You can open a Post Office Monthly Income Scheme account only at a post office. As per the current India Post rules, the deposit is made by cheque at a branch post office. Follow these steps to open your account:
STEP 1 - Visit your nearest post office that handles savings schemes. If you do not have a post office savings account, open one first, because the monthly interest is usually credited to this account.
STEP 2 - Get the account opening form from the post office or download it from the official India Post forms page. You also need to fill the KYC form for a new customer.
STEP 3 - Fill the form and attach self-attested copies of your identity and address proof along with 2 passport-size photographs. Keep the original documents handy for verification by the post office official.
STEP 4 - Fill the nomination form with the details of your nominee, including name, date of birth, and mobile number. Nomination can be made for up to 4 people and is mandatory at the time of opening.
STEP 5 - Submit the deposit of at least ₹1,000 by cheque at the post office. For deposits above ₹50,000 you must quote your PAN, and for investment above ₹10 lakh you need to give proof of the source of funds as per PMLA rules.
Documents
Keep the following documents ready when you go to the post office:
- Proof of Identity: A copy of your Aadhaar card, PAN card, Passport, Voter ID, or Driving License.
- Proof of Address: Recent utility bills or government-issued identity documents.
- Photographs: Recent passport-sized color photographs.
- KYC Form: Filled KYC form, needed for all new customers of post office savings schemes.
Premature Closure and Maturity Rules
The account cannot be closed before one year from the date of opening. If you close the account after 1 year but before 3 years, a deduction of 2% of the deposit is made. If you close it after 3 years but before 5 years, a deduction of 1% of the deposit is made. Premature closure is done by submitting a prescribed application form along with the passbook at the post office.
At maturity, the full principal amount is returned without any deduction. You can either withdraw the money or reinvest it in a fresh account at the prevailing rate. The account does not renew automatically, so you need to apply for a new account if you want to continue. If the maturity amount is left in the linked savings account, it earns only the post office savings account rate. To compare this scheme with other post office options, check the complete list of post office schemes.
References
For further details, you can check the official India Post pages given below:
- Post Office Saving Schemes - India Post
- National Savings (Monthly Income Account) Scheme, 2019 - Official Rules
- POMIS Interest Rate for July-September 2026 - Upstox News
FAQ's
How can I withdraw money from my account after the tenure?
You can withdraw your principal amount once the 5-year tenure completes. You may visit the post office with the passbook and a closure form, or have the funds credited to your savings account.
Can I transfer my account to another post office?
Yes, you can transfer your account from one post office to another anywhere in India. As per the official India Post fee schedule, a transfer fee of ₹100 applies for the transfer.
Can I reinvest my accumulated amount?
Yes, at the end of the 5-year tenure, you have the option to open a fresh account with the maturity proceeds at the prevailing interest rate.
Is there any TDS on the interest earned?
There is no tax deducted at source (TDS) on the interest, but the interest earned is added to your taxable income and taxed as per your income slab.
Is there a nomination facility?
Yes, nomination is mandatory at the time of opening the account, and you can register up to 4 people as nominees. You can also change the nomination later by submitting a fresh form at the post office.
Does this scheme offer tax rebates under 80C?
No, this scheme does not provide any tax benefit under section 80C of the Income Tax Act. Only the interest income is taxable.
Is this scheme suitable for senior citizens?
Yes. It is highly recommended for retired persons and senior citizens because of the guaranteed monthly income. Those above 60 years of age can also compare it with the Senior Citizens Savings Scheme, which pays a higher rate of 8.2% per annum.
What happens if I forget to withdraw funds after 5 years?
The account does not renew on its own. The maturity amount, if left in the linked savings account, earns interest only at the post office savings account rate of 4% per annum.
What is the minimum amount to open an account?
The account can be opened with a minimum deposit of ₹1,000, and the deposit has to be in multiples of ₹1,000.