The Buyt Desk
Are you looking for a safe investment option that can promise a risk-free return? The Post Office has an array of savings cum investment schemes that can help you in saving and growing your money. The Post Office Monthly Income Scheme(PMIS/MIS) is one such popular savings scheme. PMIS guarantees a return with an interest rate of 6.6% per annum. This scheme returns the interest to investors as a fixed monthly income. Do note that these interest rates are subject to change as and when the government changes the interest on small saving schemes.
The 3 main benefits of PMIS which make it very popular are-
-Safety of the seed capital
– Steady Return
– Assures Fixed Monthly Income
How Does The PMIS Work?
Suppose you invested 1,00,000 in the PMIS scheme with a maturity period of 5 years. With an annual interest rate of 6.6%, you will get a fixed interest of 550 Rs every month. This interest will be returned to you every month. At the time of maturity, you will get your principal amount of Rs 1,00,000 back. You can either choose to withdraw the interest amount every month or can accumulate it. However, note that the interest amount will not give you any benefit even if left in PMIS. Thus, it is good that you withdraw it. To benefit investors, PMIS has given an option. You can deposit the interest amount in the recurring deposit, where you would get a fixed interest.
The Other Benefits Of Post Office Monthly Income Scheme
-
The post office monthly income scheme can be transferred very easily from one city to another city’s post office. You can change the post office in the same city too. You can easily do so without incurring any cost.
-
It could be a single adult account or a joint account can also be opened. A guardian can open a PMIS account for his/her minor child. A minor above the age of 10 can have a PMIS account in his/her name.
-
It gives you the option to reinvest the maturity amount into PMIS.
-
The interest earned through PMIS is taxable, but no tax is applicable on the principal amount.
-
The maturity term of PMIS is five years. To reap all the benefits of investment, you must keep the amount for that period. However, the scheme allows a premature exit.
Pre-matue Exit From PMIS
-
You can’t withdraw money before the expiry of the 1st year.
-
If you choose to close the account after 1 year and before the completion of 3 years from the date of account opening you will have to pay a penalty of 2% from the principal. The remaining amount after this deduction can be withdrawn.
-
If the account is closed after 3 years and before the full maturity of 5 years then a deduction of 1 % from the principal will be applicable.
-
You must fill a pre-mature exit form in the prescribed application form and request for early closure.
What is the Eligibility Criteria for PMIS?
PMIS has been categorically designed for low risk-taking investors, therefore, it suits the senior citizens and retired individuals more. The only requisite to invest in PMIS is that the investor must be a citizen of India.
The lowest age for entry in the scheme is ten years, and the maximum amount a minor individual can invest in the post office schemes is Rs 3,00,000.
The maximum limit in PMIS for elders is 4.5 Lakhs for individuals and 9 Lakhs for joint accounts. The minimum limit is 1500 for both individuals and joint accounts.
Conclusion – PMIS is a credible tool for investors who don’t want to take the risk, instead yearn for a steady income from their investment. Additionally, PMIS has government backing, which makes it one of the most credible investment options in the present time.
