Home / Money / Personal Finance /  Even minors above 10 can open an account under post office monthly income scheme

As the government has kept interest rates on small savings schemes unchanged for the quarter ending 30 September, the five-year monthly income scheme will fetch an interest rate of 6.6% per annum, payable monthly.

The post office monthly income scheme (POMIS) is a savings scheme, wherein you can invest a specific amount and earn a fixed interest each month. One can open such an account in any post office.

Any Indian resident can open a POMIS account. Also, up to three adults can jointly open such an account. Besides, any minor above 10 years of age can open a POMIS account in his/her name.


The minimum sum required to open this account is 1,000. But, you can deposit a maximum of only 4.5 lakh in a single-holder account; the limit is 9 lakh in a joint account, in which all holders have equal share in the investment.


It is vital to note that the interest is paid on completion of a month from the date of opening an account and it continues till maturity. If you do not claim the interest paid every month, such interest would not earn any additional interest. Moreover, any deposit in excess of the fixed limits would be refunded. The excess sum deposited fetches interest only at the post office savings account rate and it would be applicable from the date of opening of the account to the date of repayment or refund.

You can also withdraw the interest through auto credit into your savings account. You can give standing instructions at the post office or get it paid through the electronic clearing system. Besides, you must know that the interest is taxable once received. This means that the interest amount is not covered under section 80C of the Income Tax Act.


You can close the account after five years by submitting the prescribed application form with your passbook at the post office where you have opened the account. However, if you die before maturity of the POMIS account, it can be closed, and the deposits refunded to your nominee or legal heirs. In that case, the interest would be paid up to the preceding month, in which a refund is made. While opening an account, you must nominate any one of your family members, so that in case if you die during the account’s term, they can claim the benefits.

You must also know that no deposit can be withdrawn before the expiry of one year from the date of deposit. However, if an account is closed prematurely after one year and before three years, a deduction of 2% from the principal would be made, and the remaining sum paid to you.

If the account is closed between three and five years, a deduction of 1% from the principal would be made, and the remaining amount would be paid to you.


Navneet Dubey

Navneet Dubey is a personal finance writer and artist. Over the past decade, he has written feature stories on insurance, financial planning, lending and borrowing.
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