Post Office Monthly Income Scheme
Post Office Monthly Income Scheme
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.
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.
Features
Only one deposit is available in
an account.
Only individuals can open the
account; either single or joint.( two or three). Interest rounded off to
nearest rupee i.e, 50 paise and above will be rounded off to next rupee. The minimum investment in a Post-Office MIS is Rs 1,000
for both single and joint accounts. The maximum investment for a single account
is Rs 3 lakh and Rs 6 lakh for a joint account. The duration of MIS is six
years.
Returns
The post-office MIS gives a return of 8% on maturity. The minimum investment in a Post-Office MIS is Rs 1,000
for both single and joint accounts
| Deposit Rs |
Monthly Interest |
Amount returned on maturity |
5,000
10,000
50,000
1,00,000
2,00,000
3,00,000
6,00,000 |
33
66
333
667
1333
2000
4000 |
5,000
10,000
50,000
1,00,000
2,00,000
3,00,000
6,00,000 |
Advantages
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. Monthly
interest can be automatically credited to savings account provided both the
accounts standing at the same post office. The interest income accruing from
a post-office MIS is exempt from tax under Section 80L of the Income Tax Act,
1961. Moreover, no TDS is deductible on the interest income. The balance is
exempt from Wealth Tax.
How to Open
You can buy 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.
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