POMIS
Post Office Monthly Income Scheme (POMIS) is a Government of India fixed-income savings scheme operated by India Post that pays interest monthly to the depositor's bank account, available to individuals aged 18 and above.
Understanding POMIS
POMIS is designed for those who need predictable monthly cash flow — typically retirees, homemakers managing household budgets, or anyone needing steady income from a fixed-income parking lot. The monthly interest is auto-credited to the depositor's linked savings account.
The maximum cap (₹9 lakh single, ₹15 lakh joint) makes POMIS suitable as a portion of fixed-income allocation rather than the entire FD substitute. For larger amounts, SCSS (₹30 lakh limit for seniors) or bank FDs offer better single-account capacity.
Why it matters
For monthly-income-focused investors, POMIS offers government-backed predictability. The 7.4% rate beats most savings accounts (3-4%) and post-tax beats most short-term FDs in the same return tier. Combined with SCSS for the larger corpus and SBI/HDFC FDs for laddered amounts, POMIS rounds out a senior-citizen fixed-income portfolio.
Example
A retired couple opens a joint POMIS with ₹15 lakh. Monthly interest: 7.4% × ₹15 lakh ÷ 12 = ₹9,250 — credited monthly to their linked SBI savings account. Over 5 years: ₹5,55,000 total interest, fully taxable at slab rate. After tax (assume 5% slab post-rebate): ~₹26,000 lost to tax; net interest ₹5.29 lakh.
A retired couple opens a joint POMIS with ₹15 lakh. Monthly interest: 7.4% × ₹15 lakh ÷ 12 = ₹9,250 — credited monthly to their linked SBI savings account. Over 5 years: ₹5,55,000 total interest, fully taxable at slab rate. After tax (assume 5% slab post-rebate): ~₹26,000 lost to tax; net interest ₹5.29 lakh.