How Post Office MIS interest is calculated
This Post Office Monthly Income Scheme (POMIS) illustration uses 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: the illustration uses 7.4% p.a., paid monthly. Use the official rate for your account-opening quarter.
- 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
At the illustrative rates used here, the Senior Citizen Savings Scheme (SCSS)
earns more annual interest for the same deposit, but pays quarterly and has eligibility conditions. 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?
This Post Office Monthly Income Scheme (POMIS) calculator defaults to an illustrative 7.4% per annum, paid monthly. Check the Ministry of Finance notification for your account-opening quarter and enter that rate. The rate applicable when you open the account stays fixed for its five-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?
The illustrations use 7.4% per annum for POMIS with monthly payouts, and 8.2% per annum for SCSS with quarterly payouts. SCSS has age and retirement eligibility conditions, whereas MIS is not limited to seniors. Compare the actual opening rates, eligibility, deposit limits and tax treatment using the SCSS calculator before choosing.
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.