The Post Office offers several safe investment options that guarantee returns without market risk.
One such popular option is the Post Office Monthly Income Scheme.
This scheme is especially useful for people who want steady income along with better interest rates.
Let’s understand how this scheme works and why it can be a good investment choice.
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What Is the Post Office Monthly Income Scheme?
The Post Office Monthly Income Scheme is a low-risk savings plan with a fixed tenure of 5 years.
It allows investors to earn regular monthly income on their deposited amount.
The minimum investment required is ₹1,500.
For a single account, the maximum investment limit is ₹4.5 lakh. Joint account holders can invest up to ₹9 lakh, while minor accounts allow a maximum investment of ₹3 lakh.
Interest Rates and Tenure Details
The interest rate for the Post Office Monthly Income Scheme depends on the tenure.
For 1, 2, and 3 years, the interest rate remains at 5.50%.
However, for the 5-year tenure, the interest rate increases to 7.6%.
This makes the 5-year option more attractive, as it offers a higher return than the Public Provident Fund, which currently provides an interest rate of 7.1%.
The key difference is that PPF comes with a long lock-in period of 15 years, while this scheme matures in just 5 years.
How to Open an Account
To open an account under this scheme, you must have a Post Office Savings Account.
If you don’t have one, you can open it at your nearest post office.
Next, collect the application form, fill in the required details, and submit it along with self-attested copies of the necessary documents.
You must carry the original documents for verification.
You will also need to provide nominee details, including name, date of birth, and mobile number.
The initial deposit should be at least ₹1,000 and can be made through cash or cheque.
Documents Required
To complete the process, you will need a government-issued identity proof such as Aadhaar card, passport, voter ID, or driving license.
You must also submit address proof, which can be a government ID or a recent utility bill, along with a passport-size photograph.
The Post Office Monthly Income Scheme is a suitable option for investors looking for stable returns, regular income, and capital safety over a shorter investment period.