Post Office MIS Scheme offers retirees and other conservative investors an opportunity to earn a fixed monthly income from a one-time deposit.
At the current annual interest rate of 7.4%, an investment of Rs 9 lakh can generate Rs 5,550 every month for five years.
The Post Office Monthly Income Scheme (MIS) is a government-backed small savings scheme designed for people who want regular interest payments without exposing their principal investment to stock market fluctuations.
It can be considered by retirees looking for a predictable source of additional monthly income.
 Post Office MIS Scheme Interest Rate and Benefits
The scheme currently offers an interest rate of 7.4% per annum for the October-December 2026 quarter. Interest is paid every month, while the original deposit remains invested for the five-year maturity period.
Investors receive the applicable interest in monthly instalments rather than having it added to the principal. The rate is determined by the government and may be revised for new deposits in subsequent quarters.
One important feature is that the interest rate applicable when an account is opened remains fixed for its five-year term. This gives investors clarity about the monthly income they can expect during that period.
 How Rs 9 Lakh Investment Generates Rs 5,550 Monthly
The monthly payout depends on the amount deposited and the applicable annual interest rate. At 7.4%, a single account with an investment of Rs 9 lakh generates Rs 66,600 in annual interest.
This works out to Rs 5,550 per month. Over the full five-year period, the investor would receive Rs 3,33,000 in interest, while the original Rs 9 lakh deposit would be returned at maturity.
The calculation assumes that the account remains invested for the entire five-year term and that the applicable interest rate is 7.4%.
The scheme has a minimum deposit requirement of Rs 1,000. The maximum investment limit is Rs 9 lakh for a single account and Rs 15 lakh for a joint account.
A joint investment of Rs 15 lakh at the same interest rate can generate Rs 9,250 per month. This may be useful for eligible family members who want to invest together and receive a regular payout.
Who Can Invest in the Post Office Monthly Income Scheme?
The scheme is not limited to retired people or senior citizens. Eligible resident individuals can open an account, making it an option for people who want a fixed monthly income from their savings.
Accounts can be opened individually or jointly, subject to the prescribed investment limits. A minor can also hold an account through a parent or legal guardian, subject to applicable rules.
For retirees, the monthly interest can help meet recurring household expenses such as groceries, utility bills and other regular payments.
However, the scheme should be considered as one part of a wider retirement income plan rather than the only source of financial support.
Premature Withdrawal and Tax Rules
The Post Office MIS has a five-year maturity period, but investors may close their accounts before maturity under specified conditions. Premature closure is not permitted during the first year.
If an account is closed after one year but before three years, a deduction of 2% of the deposit applies. For closure after three years but before five years, the deduction is 1% of the deposit.
Investors should also understand the tax treatment before putting their savings into the scheme. The interest earned is taxable according to the investor’s applicable income tax slab.
The scheme does not provide a deduction under Section 80C.
The monthly interest is not compounded within the account. If the payout is left unwithdrawn, it does not automatically earn additional interest under the MIS.
For people approaching retirement, the scheme offers a straightforward way to convert a lump-sum deposit into predictable monthly interest.
Before investing, customers should compare the payout with their expenses, consider tax liability and ensure that enough savings remain available for emergencies.
