If you want a regular monthly income without taking high investment risk, the Post Office Monthly Income Scheme (MIS) can be an option to consider.
Under this scheme, you make a lump-sum investment and receive interest every month.
The account has a 5-year maturity period, giving investors a fixed source of income during the tenure.
The current interest rate mentioned for the scheme is 7.40% per year.
How Safe Is the Post Office MIS?
Post Office savings schemes are backed by the government, making them popular among people who prefer safer investment options.
The MIS is designed to provide regular income from the interest earned on your deposit. You do not need to make monthly investments once the account is opened.
Anyone aged 18 years or above can open an MIS account.
Start With Just ₹1,000
You don’t need a huge amount to open a Post Office MIS account. The minimum investment is ₹1,000.
The scheme also allows both single and joint accounts. A joint account can be opened by up to three adults.
The maximum investment limit is:
Single account: ₹9 lakh
Joint account: ₹15 lakh
One important advantage is that the interest rate applicable when you make the investment remains fixed for your account until maturity, even if the government later changes the MIS interest rate.
How Can You Earn ₹5,001 Every Month?
Let’s look at an example.
If you invest around ₹8.11 lakh in a single MIS account at an annual interest rate of 7.40%, the monthly interest works out to approximately ₹5,001.
This ₹5,001 is not a separate bonus. It is the monthly interest earned on your investment.
So, your original investment remains deposited in the scheme while the interest provides regular monthly income.
Be Careful About Premature Withdrawal
The Post Office MIS comes with a 5-year maturity period. To get the full benefit, it is important to keep the account until maturity.
If you withdraw the money early, a deduction can apply:
After 1 year but before 3 years: 2% of the principal amount may be deducted.
After 3 years but before 5 years: 1% of the principal amount may be deducted.
Therefore, before investing, make sure you can keep the money in the scheme for the required period.
Who Can Consider This Scheme?
The Post Office MIS may suit investors who want regular monthly income and prefer government-backed savings options.
However, before investing, check the latest interest rate, investment limits and withdrawal rules applicable at the time of opening the account.
