New Delhi: India Post's investment possibilities are among the most well-known in the industry. While they provide a poor return when compared to other options, their risk-free nature and government backing make them popular among investors, particularly those from the old school. The Post Office Monthly Income Scheme is one such popular saving and investing option. It enables you to invest a certain amount and receive a predictable monthly income. By providing the relevant documentation, an account under this system can be opened at the nearest post office.
Lock-in Period
The Post Office Monthly Income Scheme has a five-year lock-in period, after which you can opt to withdraw or reinvest your money. Because you may start investing with as little as Rs 1,000, it is incredibly accessible and popular among middle- and low-income investors. The scheme comes with tax incentives under Section 80C of the Income Tax Act, in addition to the guaranteed returns supplied by the Post Office.
The Post Office Monthly Income Scheme allows you to invest up to Rs 4.5 lakh individually or Rs 9 lakh together. The government adjusts the interest rate based on market conditions, and the rate was set at 6.6 percent per annum for the quarter ending September 30, 2021. Investors can either cash out their interest at the post office or have it deposited into their savings account. The option to transfer monies to a recurring deposit account was recently added by the Post Office.
As a result, an investor who invests Rs 4 lakh in this scheme will receive a monthly income or return of Rs 2000. After the maturity period has passed, the investor has the option of withdrawing or reinvesting the funds.
Eligibility Criteria
Only a resident Indian can open a POMIS account. By submitting the needed documentation to the nearest Post Office, any adult can open an account. POMIS accounts can be opened by minors who are 10 years old or older. When kids reach the age of 18, they will be eligible for the benefits.
Premature Withdrawal
The money invested in Post Office MIS can be withdrawn before the maturity date, however there will be penalties. If an investor decides to withdraw their money before the first year is out, they will not be eligible for any advantages. Premature withdrawals between the first and third years will incur a 2% penalty, while withdrawals between the third and fifth years will result in the whole corpus being reimbursed after a 1% penalty.
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