How the Post Office Monthly Income Scheme pays you
How Post Office MIS interest is worked out and paid every month, what ₹1 lakh to ₹15 lakh pays at 7.4%, the single and joint limits, early closure, and how the income is taxed.
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In short
- MIS pays simple interest every month for five years. Monthly income = deposit × rate ÷ 12, so ₹9 lakh at 7.4% pays ₹5,550 a month.
- A single account takes up to ₹9 lakh and a joint one up to ₹15 lakh; ₹15 lakh pays ₹9,250 a month.
- The rate is fixed for the five years at the rate on the day you open the account.
- Closing early costs 2% of the deposit after one year and 1% after three years; it cannot be closed in the first year.
- The income is taxable at your slab, with no Section 80C benefit and no TDS.
The Post Office Monthly Income Scheme, known as POMIS or simply MIS, turns a lump sum into a fixed monthly income for five years. You deposit once, the post office pays interest into your savings account every month, and at the end of five years you get the whole deposit back. Retired people use it for household expenses, and families use it to park a lump sum such as a retirement benefit or the proceeds of a sale. The calculator above shows the monthly income, the total over five years and the tax. This guide explains the rules behind them.
How to use the calculator
- Choose single or joint. A single account takes up to ₹9 lakh, a joint account up to ₹15 lakh.
- Set the amount, in multiples of ₹1,000. If it is above the limit for the account type, the calculator uses the limit and says so.
- Check the rate. It starts at the current MIS rate. For an account opened earlier, set the rate in force then.
- Pick your tax slab to see the tax on the yearly income.
The results show the income every month, the income a year, the total over five years, the tax a year at your slab, and the deposit returned at the end. The table shows each year's income and the running total.
The formula
MIS pays simple interest, paid out every month rather than added to the deposit:
Income a year = deposit × rate ÷ 100
Income a month = deposit × rate ÷ 1,200
Total over five years = income a year × 5
For ₹9,00,000 at 7.4%:
- a year: 9,00,000 × 7.4 ÷ 100 = ₹66,600
- a month: ₹66,600 ÷ 12 = ₹5,550
- over five years: ₹66,600 × 5 = ₹3,33,000
At the end of the five years the ₹9,00,000 is repaid in full.
What different deposits pay at 7.4%
| Deposit | Account | Every month | A year | Over 5 years |
|---|---|---|---|---|
| ₹1,00,000 | Single or joint | ₹616.67 | ₹7,400 | ₹37,000 |
| ₹5,00,000 | Single or joint | ₹3,083.33 | ₹37,000 | ₹1,85,000 |
| ₹9,00,000 | Single (the maximum) | ₹5,550 | ₹66,600 | ₹3,33,000 |
| ₹15,00,000 | Joint (the maximum) | ₹9,250 | ₹1,11,000 | ₹5,55,000 |
Every ₹1 lakh pays ₹616.67 a month, so it is easy to work back: for ₹5,000 a month you need a little over ₹8.1 lakh.
The deposit limits
- Minimum: ₹1,000, in multiples of ₹1,000.
- Single account: up to ₹9 lakh.
- Joint account: up to ₹15 lakh, held by up to three adults. Each joint holder has an equal share in the investment.
The limits apply across all your MIS accounts together, not to each account. A person can hold a single account and a share of a joint account, but their total, counting their share of joint deposits, cannot go above ₹9 lakh. A married couple who want the full ₹15 lakh therefore usually open one joint account.
A guardian can open an account for a minor, and a minor of 10 or older can open one in their own name; their limit is separate from the guardian's.
When the income is paid
Interest is paid at the end of each month, starting one month after the account is opened, and credited to your post office savings account. From there it can be transferred automatically, for example to a recurring deposit.
The interest is not compounded inside the scheme. If you leave it lying in the savings account, it earns only the savings rate, 4% at the post office. To make it grow, set up a standing instruction to move it into a recurring deposit, which turns the monthly income into a second lump sum after five years.
The rate is fixed when you open
The government sets small savings rates every quarter. MIS is 7.4% for accounts opened between 1 October and 31 December 2026, unchanged for several quarters.
The rate on the day you open applies for the full five years. If rates fall later, your income does not; if they rise, it does not go up either. That predictability is the point of the scheme.
Closing early
You can close an MIS account before five years, at a cost:
| Closed | Deduction from the deposit |
|---|---|
| Within the first year | Not allowed |
| After one year, before three | 2% |
| After three years, before five | 1% |
On ₹9 lakh, closing after two years costs ₹18,000, and after four years ₹9,000. The interest already paid is not taken back. If the account holder dies, the account is closed and paid to the nominee or legal heirs, with interest up to the previous month and without these deductions.
At maturity the deposit can be taken back, or reinvested in a new MIS account at the rate then in force.
How MIS income is taxed
- The interest is taxable at your slab rate, plus 4% health and education cess. On ₹66,600 of yearly income at a 30% slab, that is ₹66,600 × 30% × 1.04 = ₹20,779, leaving ₹45,821.
- No Section 80C deduction on the deposit, in either regime.
- No TDS. The post office does not deduct tax at source on MIS interest, so you must report it in your tax return yourself.
- Senior citizens in the old regime can deduct up to ₹50,000 a year of interest from post office and bank deposits under Section 80TTB, which covers MIS interest.
In the new tax regime, the higher basic exemption and the Section 87A rebate mean many retired people with moderate income pay no tax on MIS interest at all. The income tax calculator shows your actual tax both ways.
MIS against SCSS and a bank FD
For a senior citizen, MIS is usually compared with the Senior Citizens' Savings Scheme and a monthly-payout FD:
| Post Office MIS | SCSS | Bank FD (monthly payout) | |
|---|---|---|---|
| Who can open | Any resident adult | 60 and above | Anyone |
| Rate | 7.4% | 8.2% | Bank's rate |
| Payout | Monthly | Quarterly | Monthly |
| Limit | ₹9 lakh single, ₹15 lakh joint | ₹30 lakh per person | None |
| 80C | No | Yes, old regime | Only 5-year tax-saver |
| TDS | No | Above ₹1,00,000 a year | Above the threshold |
SCSS pays more and is the first choice for anyone eligible; the SCSS calculator shows its quarterly payout. MIS is open to anyone, pays monthly, and is often used alongside SCSS for the amount beyond its limit, or by people under 60 who want a regular income. A bank FD has no limit but its rate varies by bank; the FD calculator helps compare.
Opening an account
You need a post office savings account first, because that is where the monthly interest goes. Then fill in the MIS account opening form at the same post office, with your identity and address proof, PAN and Aadhaar, two photographs, and the deposit by cash or cheque. A cheque deposit counts from the date the cheque is cleared. Add a nominee when you open the account; it can also be added later.
Many people open several smaller MIS accounts a year or two apart rather than one large one. When the first matures, the next is still running, and each can be renewed at the rate then in force, so the income is never all exposed to one year's interest rate.
What this calculator assumes
- Interest is simple and paid every month: deposit × rate ÷ 1,200, worked in paise.
- The rate stays the same for the full five years, as it does for an account.
- The deposit is rounded to a multiple of ₹1,000 and capped at ₹9 lakh for a single account or ₹15 lakh for a joint one.
- Tax is your slab rate plus 4% cess on the full yearly income, before any 80TTB deduction.
- The income is not reinvested; reinvesting it, for example in a recurring deposit, would add to the total.