Post Office MIS scheme offers retirees a way to earn a fixed monthly income from their savings without taking exposure to stock market fluctuations.
The government-backed Monthly Income Scheme (MIS) currently offers 7.4% annual interest, payable every month, making it an option for people who want predictable income after retirement.
Unlike regular fixed deposits that generally pay interest at selected intervals, this scheme is designed to provide monthly interest payments.
Investors deposit a lump sum for five years and receive interest every month, while the original investment is returned at maturity.
The scheme is not restricted to senior citizens. Any eligible resident Indian can open an account, making it useful for people who want a regular income stream from their savings.
Post Office MIS Scheme Offers 7.4% Interest
For the October-December 2026 quarter, the Post Office Monthly Income Scheme continues to offer an annual interest rate of 7.4%.
The government has kept the interest rates on small savings schemes unchanged for this quarter.
The interest is calculated annually but paid monthly. Once an account is opened, the applicable interest rate remains fixed for its five-year tenure.
Investors can start with a minimum deposit of Rs 1,000. Deposits must be made in multiples of Rs 1,000.
The maximum investment limit is Rs 9 lakh for an individual account and Rs 15 lakh for a joint account. The maximum investment limit applies across the investor’s eligible MIS accounts.
How Much Monthly Income Can You Earn?
The monthly income depends on the amount deposited in the account. At the current 7.4% annual interest rate, investors receive approximately Rs 61.67 per month for every Rs 10,000 invested.
Here are some examples of the monthly income:
| Investment Amount | Monthly Interest |
|---|---|
| Rs 1 lakh | Rs 617 |
| Rs 3 lakh | Rs 1,850 |
| Rs 5 lakh | Rs 3,083 |
| Rs 9 lakh | Rs 5,550 |
| Rs 15 lakh (joint account) | Rs 9,250 |
For example, an individual investing Rs 9 lakh can receive approximately Rs 5,550 every month. Over five years, the total interest would amount to Rs 3.33 lakh, while the original Rs 9 lakh deposit would be returned at maturity.
Similarly, a joint account with an investment of Rs 15 lakh can generate approximately Rs 9,250 in monthly interest. These calculations are based on the current 7.4% rate.
Who Can Open a Post Office MIS Account?
The scheme is available to resident Indian individuals. Adults can open accounts individually or jointly, subject to the prescribed investment limits.
A parent or legal guardian can also open an account on behalf of an eligible minor. A minor aged 10 years or above can operate an account independently under the applicable rules.
Joint accounts can be opened by two or three adults. However, the overall investment limit is calculated according to each account holder’s share.
People planning to invest their retirement savings should remember that the scheme does not offer a higher interest rate simply because the investor is a senior citizen. The same MIS interest rate applies to eligible investors.
Withdrawal Rules and Tax on MIS Interest
The Post Office MIS account has a fixed maturity period of five years. However, investors can close the account prematurely after completing one year.
If the account is closed after one year but before three years, a deduction of 2% of the deposited amount applies. If it is closed after three years but before five years, the deduction is 1% of the deposit.
No premature closure is permitted during the first year.
The monthly interest received under the scheme is taxable according to the investor’s applicable income tax slab. The deposit does not qualify for a deduction under Section 80C of the Income Tax Act.
Although tax is not deducted at source on the monthly interest, investors must include the taxable interest in their income tax calculations.
MIS or Senior Citizen Savings Scheme: Which Is Better?
Retirees comparing government-backed savings options can also consider the Senior Citizen Savings Scheme (SCSS).
For the October-December 2026 quarter, SCSS offers an annual interest rate of 8.2%, compared with 7.4% under MIS. SCSS has a maximum investment limit of Rs 30 lakh and generally pays interest quarterly.
However, SCSS is available only to eligible senior citizens and certain qualifying retired individuals. MIS, on the other hand, has no minimum age requirement and provides monthly interest payments.
The choice depends on an investor’s age, income requirements, investment amount and preference for monthly or quarterly payments.
For retirees who need a regular monthly amount to manage household expenses, MIS can be worth considering.
However, investors should compare the tax implications, withdrawal conditions and alternative savings options before committing their retirement savings.
