Post Office Monthly Income Scheme: 7.4% Rate, Limits and Rules
The Post Office Monthly Income Scheme (POMIS, also called Post Office MIS) is a government-backed small savings scheme that turns a one-time deposit into a fixed monthly interest payment for five years. For the October to December 2026 quarter, it pays 7.4% a year, which works out to about ₹62 a month for every ₹10,000 deposited.
The rate comes from the Finance Ministry’s quarterly review. On 30 September 2026, it kept all small savings rates unchanged for the 1 October to 31 December 2026, as reported by The Economic Times and Upstox News. Here is how it works, what you can earn, and the rules that catch people out.
Post Office Monthly Income Scheme at a glance
| Feature | Rule |
|---|---|
| Interest rate (1 Oct to 31 Dec 2026) | 7.4% a year, paid monthly |
| Minimum deposit | ₹1,000, and in multiples of ₹1,000 |
| Maximum deposit | ₹9 lakh in a single account; ₹15 lakh in a joint account |
| Tenure | 5 years from the date of opening |
| Joint holders | Up to three adults, each with an equal share |
| Early closure | Not before 1 year; 2% of the deposit deducted between 1 and 3 years, 1% after 3 years |
| Tax | Interest is taxable at your slab rate |
The deposit limits were raised on 1 April 2023, from ₹4.5 lakh to ₹9 lakh for single accounts and from ₹9 lakh to ₹15 lakh for joint accounts, under a Finance Ministry gazette notification that the Department of Posts circulated in SB Order No. 07/2023.
What is the Post Office MIS interest rate now?
The Post Office MIS interest rate is 7.4% a year for deposits made between 1 October and 31 December 2026. The government reviews small savings rates every quarter, so the rate for January to March 2027 is due by the end of December.
The payout is fixed when you open the account, so an account opened this quarter earns 7.4% for all five years, whatever happens at later reviews.
How much will you earn every month?
At 7.4%, every ₹1 lakh deposited earns about ₹617 a month. The monthly payment is simply the deposit multiplied by 7.4% and divided by 12.
| Deposit | Monthly interest | Yearly interest | Interest over 5 years |
|---|---|---|---|
| ₹1 lakh | ₹617 | ₹7,400 | ₹37,000 |
| ₹5 lakh | ₹3,083 | ₹37,000 | ₹1,85,000 |
| ₹9 lakh (single account limit) | ₹5,550 | ₹66,600 | ₹3,33,000 |
| ₹15 lakh (joint account limit) | ₹9,250 | ₹1,11,000 | ₹5,55,000 |
Figures are before tax and rounded. You get the deposit back in full after five years. Because interest is paid out monthly, nothing compounds inside the scheme; to grow it, reinvest the payouts yourself, for example, in a post office recurring deposit.
Who can open a Post Office Monthly Income Scheme account?
Any resident Indian adult can open a POMIS account, alone or jointly with up to two other adults. A guardian can also open one for a minor, and the limit for an account held for a minor is counted separately from the guardian’s own limit.
You can hold more than one MIS account, but your total across all of them, including your share in joint accounts, cannot go above ₹9 lakh.
How to open a POMIS account
You open a Post Office MIS account at any post office branch. According to an India Post scheme leaflet, you need:
- Two passport-size photographs.
- A copy of your Aadhaar card.
- A copy of your PAN card, or Form 60 if you do not have one. If you are unsure about your PAN status, our PAN 2.0 explainer covers what has changed.
- The account opening form, with nomination details.
The monthly interest can be credited straight to your post office savings account or to a bank account. India Post also notes that you can fund the deposit by sending money to your post office savings account by NEFT using the common IFSC IPOS0000DOP.
Can you withdraw early from Post Office MIS?
Yes, but not in the first year, and early closure costs money. After one year and before three years, 2% of the deposit is deducted; after three years and before five years, 1% is deducted.
On a ₹9 lakh deposit, that is a ₹18,000 deduction if you close in year two and ₹9,000 if you close in year four. If the holder dies before maturity, India Post says the account can be closed and paid to the nominee or legal heir.
Is Post Office MIS interest taxable?
Yes. The interest is added to your income and taxed at your slab rate, and the deposit does not qualify for a Section 80C deduction. If tax-free growth matters more than a monthly payout, the PPF interest rate of 7.1% is lower, but its interest is fully exempt from tax. For someone in a low or nil tax bracket, such as many retirees, the post-tax return stays close to 7.4%; for someone in the 30% slab, it is much lower.
POMIS vs SCSS: which suits a retiree?
For anyone aged 60 or above, the Senior Citizens’ Savings Scheme usually pays more. SCSS pays 8.2% for the same quarter, with interest paid quarterly, according to the rate table published by The Economic Times. POMIS pays less but has no age limit and pays every month, which some families prefer for household bills.
| Scheme | Rate (Oct-Dec 2026) | Interest paid | Who can invest |
|---|---|---|---|
| Post Office Monthly Income Scheme | 7.4% | Monthly | Any resident adult; minors through a guardian |
| Senior Citizens’ Savings Scheme | 8.2% | Quarterly | Mainly people aged 60 and above |
| 5-year Post Office Time Deposit | 7.5% | Annually (compounded quarterly) | Any resident individual |
Retirees drawing a pension should also keep their annual life certificate for 2026 up to date, since a missed deadline holds back the pension itself. For other options for families and seniors, see our roundup of government schemes in 2026, and for long-term saving for a child, our guide to NPS Vatsalya. Parents saving for a daughter can also look at the Sukanya Samriddhi Yojana, which pays 8.2% this quarter and is tax-free.
Frequently asked questions
What is the maximum amount I can invest in Post Office MIS?
₹9 lakh in a single account and ₹15 lakh in a joint account. Your total across all MIS accounts, including your share in joint accounts, cannot go above ₹9 lakh.
How much interest do I get on ₹9 lakh in Post Office MIS?
About ₹5,550 a month at 7.4%, or ₹66,600 a year, before tax.
Is Post Office MIS safe?
It is a Government of India small savings scheme run through the Department of Posts, so it carries no market risk. The trade-off is a fixed rate and a penalty for early exit.
What happens after 5 years?
You close the account with the application form and passbook at your post office and get the deposit back. India Post says an account left open after maturity earns post-maturity interest at the savings account rate of 4%.
Sources: The Economic Times, rates for 1 October to 31 December 2026; Department of Posts, SB Order No. 07/2023; India Post scheme leaflet; Upstox News, POMIS rate for October-December 2026. Rates change quarterly; check your post office before you invest. This is general information, not personal financial advice.
Featured image: Subhashish Panigrahi / Wikimedia Commons, CC BY-SA 4.0 (resized). A small India Post office in Ooty, Tamil Nadu; illustrative.
