Calculate Your Monthly Income
Important: The interest rate for MIS is set by the Government and is subject to change. The rate is fixed for your investment once you open the account. Always check the official Post Office website for the latest rates.
Your MIS Payouts
Understanding the Post Office Monthly Income Scheme (MIS)
Think of the Post Office Monthly Income Scheme (MIS) as a super safe savings plan that pays you a fixed amount of money every single month. You deposit a lump sum of money once, and the post office gives you a regular monthly income in the form of interest for a period of 5 years. It's a fantastic choice for retirees, senior citizens, or anyone who needs a steady, predictable income to cover their monthly expenses without any risk to their original investment.
Who Can Open an MIS Account?
The rules for opening an account are very simple and cover most people:
- Any single adult who is a resident of India.
- Up to three adults can open a joint account together.
- A guardian can open an account on behalf of a minor (a child below 18 years).
- A minor above the age of 10 can open and operate an account in their own name.
Investment Limits and Rules
It's important to know how much you can invest:
- For a Single Account: You can invest a maximum of ₹9 lakh.
- For a Joint Account: The maximum investment limit is higher, at ₹15 lakh.
- Minimum Investment: You can start an MIS account with as little as ₹1,000.
- One-Time Investment: You deposit money only once when you open the account. You cannot add more money to it later. However, you can open multiple MIS accounts.
How Your Monthly Income is Calculated and Paid
- Fixed Interest Rate: The interest rate you get is locked in for the entire 5-year period. This means your monthly income will not change, even if the government changes the interest rates later.
- Monthly Payout: The interest is calculated on your deposit amount and is paid to you every month. You can have this money automatically credited to your Post Office Savings Account.
- No Compounding Benefit: The monthly interest is paid out to you; it is not added back to your principal amount to earn more interest. This scheme is designed for income, not growth.
What Happens After 5 Years? (Maturity & Early Withdrawal)
- Full Principal Return: After the 5-year tenure is complete, you get your entire initial deposit amount back, safe and sound.
- Need Money Early?: You cannot withdraw money within the first year. If you need to close the account before 5 years, a penalty is charged:
- If you close between 1 and 3 years, a penalty of 2% of your deposit is deducted.
- If you close between 3 and 5 years, a penalty of 1% of your deposit is deducted.
Tax Rules for MIS - A Simple Guide
Is MIS Tax-Free? Let's clarify:
The Post Office MIS has specific tax rules that you should be aware of:
- No 80C Benefit: The amount you invest in MIS is NOT eligible for tax deductions under Section 80C of the Income Tax Act.
- Taxable Interest: The monthly income (interest) you receive is fully taxable. It is added to your annual income and taxed as per your income tax slab.
- TDS (Tax Deducted at Source): The Post Office will deduct TDS if your interest income for the year is more than ₹40,000 (or ₹50,000 for senior citizens).
- How to Avoid TDS: If your total annual income is below the taxable limit, you can submit Form 15G (for individuals below 60) or Form 15H (for senior citizens) to the post office. This tells them not to deduct any tax.