What am I?
Called a post office monthly income scheme, I give assured returns. I am a debt instrument provided by the government of India. You’ll find me at post offices.
How do I work?
I pay an interest rate of 8% per annum, which is payable monthly. I mature after six years. So, if you deposit Rs1 lakh in me today, I will give you a monthly income of Rs666 for six years. On maturity, you will get back your Rs1 lakh and a bonus. You can invest a maximum of Rs4.5 lakh in an individual account and Rs9 lakh in a joint account in the denominations of Rs1,500. You can withdraw me prematurely after a year. If you do so before three years, 2% will be deducted from your total deposit. After three years, 1% would be deducted.
Who can buy me?
I can be opened by an individual, jointly by two or three adults, and a minor through a guardian. In fact, a minor who has turned 10 can open an account in his own name. I work best for retired employees or senior citizens, who have a lump sum in the form of provident fund or other savings to invest and want regular income.
Red flags about me
Post offices have not been known for best customer services. While things are improving with computerization, not all post offices are computerized yet.