How Post Office MIS interest is calculated
The Post Office Monthly Income Scheme (POMIS) pays a fixed rate of 7.4% per annum,
credited as simple interest every month — it is not compounded. The monthly income
is:
- Monthly income = Deposit × annual rate ÷ 12
So a ₹9,00,000 deposit at 7.4% pays ₹9,00,000 × 7.4% ÷ 12 =
₹5,550 every month, which is ₹66,600 a year. Your principal stays the
same throughout and is returned in full at maturity, so over the 5-year term you receive
₹3,33,000 in interest on top of your deposit.
Post Office MIS rate & key features (2026)
- Interest rate: 7.4% p.a., paid monthly (reviewed every quarter; locked at the rate when you open the account).
- Tenure: fixed 5 years; you can reinvest for another term at maturity.
- Deposit limit: minimum ₹1,000; maximum ₹9,00,000 single and ₹15,00,000 joint (raised in 2023).
- Eligibility: any resident adult, single or joint (up to 3 adults); also available for minors. No age limit.
- Where to open: any post office.
Premature closure rules & penalty
POMIS can be closed early after the first year, with a penalty on the deposit:
- Within 1 year: closure is not allowed.
- After 1 year, before 3 years: 2% of the deposit is deducted.
- After 3 years, before 5 years: 1% of the deposit is deducted.
The monthly interest already paid to you is not recovered. Turn on
Estimate premature closure above to see the penalty and net amount for your case.
Tax on Post Office MIS
POMIS is a pure income product: the interest is fully taxable as per your slab
under "Income from other sources", but the post office deducts no TDS on it. The
deposit does not qualify for a Section 80C deduction. Remember to declare the
interest in your return — you can check your overall liability with our
income tax calculator.
POMIS vs SCSS, FD and other options
For seniors, the Senior Citizen Savings Scheme (SCSS) pays a higher
8.2% and allows up to ₹30 lakh, so it usually beats POMIS on income. A
fixed deposit with a monthly-income option offers flexible tenures, the
5-year NSC is a tax-saving lump-sum option, and
PPF suits tax-free long-term growth. Many retirees combine POMIS and
SCSS to build a larger, steadier monthly income.
Frequently asked questions
What is the Post Office MIS interest rate in 2026?
The Post Office Monthly Income Scheme (POMIS) interest rate is 7.4% per annum for the current quarter, paid out monthly. The rate is set by the Ministry of Finance and reviewed every quarter, but the rate that applies when you open the account stays fixed for the full 5-year term.
How is Post Office MIS interest calculated?
POMIS pays simple interest every month: Monthly income = Deposit × annual rate ÷ 12. For example, ₹9,00,000 at 7.4% pays ₹9,00,000 × 7.4% ÷ 12 = ₹5,550 a month, or ₹66,600 a year. The principal is not compounded — it is returned in full at the end of 5 years, and you draw the interest as monthly income.
What is the maximum deposit in Post Office MIS?
The maximum is ₹9,00,000 (₹9 lakh) in a single account and ₹15,00,000 (₹15 lakh) in a joint account, raised from ₹4.5 lakh / ₹9 lakh in the 2023 Budget. In a joint account each holder’s share counts toward their individual limit. The minimum deposit is ₹1,000, in multiples of ₹1,000.
Who can open a Post Office MIS account?
Any resident Indian adult can open a POMIS account, individually or jointly (up to three adults). An account can also be opened on behalf of a minor, and a minor above 10 years can operate their own. NRIs and HUFs are not eligible. Unlike SCSS, there is no age requirement.
What is the penalty for premature closure of POMIS?
POMIS cannot be closed in the first year. If you close it after 1 year but before 3 years, 2% of the deposit is deducted; closing after 3 years but before 5 years deducts 1% of the deposit. The interest already paid to you is not recovered. Turn on the premature-closure estimate above to see the exact figure for your case.
Is Post Office MIS interest taxable and is there TDS?
The interest is fully taxable as per your income-tax slab under "Income from other sources", but the post office does not deduct any TDS on POMIS interest. The deposit does not qualify for a Section 80C deduction, so POMIS is a pure income product rather than a tax-saving one. You must declare the interest in your return.
POMIS vs SCSS — which is better for monthly income?
POMIS pays 7.4% monthly, is open to all adults, and caps at ₹9 lakh single / ₹15 lakh joint. SCSS pays a higher 8.2% (quarterly) but is only for seniors (60+) with a ₹30 lakh cap and an 80C benefit. If you are a senior, SCSS usually earns more; many retirees use both to build a larger, steadier income. Compare with our SCSS calculator.
Can I reinvest POMIS after 5 years?
Yes. On maturity you can withdraw the principal or open a fresh POMIS account and reinvest it at the interest rate prevailing then. There is no automatic extension like SCSS, so you simply close and re-open to continue earning monthly income.